Title: The influence of age and size on the relationships between debt and determinants: an empirical study on Portuguese SMEs

Authors: Zelia Serrasqueiro

Addresses: Management and Economics Department, Beira Interior University, Estrada do Sineiro, Polo IV, 6200 Covilha, Portugal; CEFAGE, Evora University, Largo dos Colegiais 2, 7004 Evora, Portugal

Abstract: SMEs influence the relationships between debt and determinants. To achieve the study objective, we consider two research sub-samples corresponding to low-age, low-size Portuguese SMEs and high-age, high-size Portuguese SMEs. The results show that greater size is more important to increase long-term debt for high-age, high-size SMEs than for low-age, low-size SMEs. Greater age of SMEs means a more accentuated decrease of short-term debt for high-age, high-size SMEs, compared to what happens with low-age, low-size SMEs. Recognition by creditors of growth opportunities and growth for low-age, low-size SMEs seems to be fundamental for these firms to obtain debt to sustain the firm growth, allowing them to invest in innovative activities, with the possibility to diversify activities and products.

Keywords: company age; panel data models; company size; Portugal; determinants; low-age; low-size; high-age; high-size; long-term debt; short-term debt; creditors; growth opportunities; firm growth; investments; innovative activities; innovation; product diversification; small and medium-sized enterprises; SMEs; entrepreneurs; entrepreneurship.

DOI: 10.1504/IJESB.2011.038533

International Journal of Entrepreneurship and Small Business, 2011 Vol.12 No.2, pp.139 - 157

Available online: 10 Feb 2011 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article