Title: Impact of capital structure on micro firm productivity: empirical evidence from Swedish firm-level data

Authors: Darush Yazdanfar

Addresses: Department of Social Sciences, Mid Sweden University, Regementsgatan 25-27, Östersund 831 25, Sweden

Abstract: The paper examines the impact of key productivity determinants at the firm level using data on 24,257 Swedish micro firms, including approximately 194,000 observations for the 2007-2008 period. The regression model includes a firm-level measure of total factor productivity as the dependent variable and capital structure and other relevant control variables as independent variables. Analysis reveals that firm-level variables, such as lagged productivity, size, age, profitability, short-term debt ratio, and industry affiliation, significantly affect firm productivity. Agency cost theory seems applicable in partly explaining the relationship between capital structure and productivity.

Keywords: total factor productivity; TFP; firm performance; capital structure; agency cost theory; Sweden; micro firms; productivity.

DOI: 10.1504/IJESB.2012.047110

International Journal of Entrepreneurship and Small Business, 2012 Vol.16 No.2, pp.223 - 237

Published online: 29 May 2012 *

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