SME Financing: A Life Cycle Approach

  • Ciarán Mac an Bhaird
Part of the Contributions to Management Science book series (MANAGEMENT SC.)


The means of finance employed for positive net present value (NPV) projects has important implications for the firm. The cumulative effect of these discrete financing decisions results in the capital structure of the firm, composition of which has long been a focus of research in the corporate finance discipline. Theoretical discourse on the subject originates from the irrelevance propositions of Modigliani and Miller (1958), stating that the capital structure of the firm is independent of its cost of capital, and therefore of firm value. This has spawned a substantial body of theoretical literature and empirical tests, which have focused primarily on the decision to employ debt or equity for investment projects. These studies focus on subjects of agency, signaling, and taxation, typically examining the incremental financing decision.


Venture Capital Capital Structure Trade Credit Firm Owner Life Cycle Model 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2010

Authors and Affiliations

  1. 1.Fiontar Dublin City UniversityDublin 9Ireland

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