Abstract
This study provides an empirical analysis of a theoretical model that explains the linkages among the various short-term and long-term sources of financing the small firm. The small firm -with annual sales of less $15 million - depends mainly on short-term trade credit and bank credit and non traditional long-term fmancing such as owners’ personal investments, informal investment, and venture capital. This study shows that bank and trade credit are used as substitutes and how dependent small firms are on non-traditional financing means. The empirical results are based on ordinary least squares regressions on a pooled timeseries/cross-section data set of small firms reporting data on the over-the-counter COMPUSTAT tape. The statistical results leave many opportunities for further analysis as new data are collected, but they show some of the important relationships and methods for analyzing the financing of the small firm.
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© 1991 Springer Science+Business Media Dordrecht
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Walker, D.A. (1991). An Empirical Analysis of Financing the Small Firm. In: Yazdipour, R. (eds) Advances in Small Business Finance. Financial and Monetary Policy Studies, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-3462-0_4
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DOI: https://doi.org/10.1007/978-94-011-3462-0_4
Publisher Name: Springer, Dordrecht
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