Title: The capital structure determinants in small and medium-sized enterprises in the information technology sector

Authors: António José Mendes Ferreira; Paulo Jorge de Almeida Pereira; Mário José Batista Franco; Dagoberto Ivo Sousa Couto dos Santos

Addresses: Instituto de Gestão e das Organizações da Saúde, Universidade Católica Portuguesa, CEFAGE-UBI, Lisboa, Portugal ' Instituto de Gestão e das Organizações da Saúde, Universidade Católica Portuguesa, Lisboa, Portugal ' Universidade da Beira Interior, CEFAGE-UBI, Covilhã, Portugal ' Instituto de Gestão e das Organizações da Saúde, Universidade Católica Portuguesa, Lisboa, Portugal

Abstract: This study aims to analyse the relation between the determinants of capital structure and the level of debt in small and medium-sized enterprises (SMEs) in the information technology (IT) sector. The methodology adopted consists of applying a questionnaire to 100 IT SMEs in Portugal, followed by descriptive statistical analysis. The results obtained will provide managers and investors with valuable insights, highlighting the importance of factors such as firm size, asset tangibility, growth opportunities, business risk, profitability, age and tax benefits. The conclusion underlines that the relation between firm size and level of debt is complex, depending on contextual factors, and that pecking order theory influences financing decisions. The study fills a gap in the literature and contributes to developing the information technology sector in Portugal. The study refers to the main theories related to capital structure, such as the theory of Durand (1952), the approaches of Modigliani and Miller (1958, 1963), agency theory (Jensen and Meckling, 1976), trade-off theory (Myers, 1984) and pecking order theory (Myers and Majluf, 1984).

Keywords: financial management; capital structure; small and medium-sized enterprises; SMEs; information technology; debt.

DOI: 10.1504/IJADS.2025.147253

International Journal of Applied Decision Sciences, 2025 Vol.18 No.4, pp.456 - 471

Received: 18 Sep 2023
Accepted: 05 Mar 2024
Published online: 14 Jul 2025 *

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