Analysis of the Determinants of the Capital Structure of SMEs in the Trade Sector
DOI:
https://doi.org/10.15678/ZNUEK.2023.0999.0106Keywords:
capital structure, SMEs, trade sector, capital structure theoriesAbstract
Objective: To verify the capital structure and the factors shaping it for commercial enterprises in the SME sector.
Research Design & Methods: A critical analysis of the literature and an analysis of statistical data using a mixed linear model.
Findings: The analysis shows the influence of factors including the structure of assets, age and size of the enterprise.
Implications / Recommendations: In the period analysed (2018–2020), long-term debt was characterised by volatility, while in the pandemic years it increased slightly in most activities in the trade sector. In turn, short-term debt increased in 2018–2019, while in 2020 it decreased. The structure of assets, age and enterprise size should be considered the most important factors influencing both short- and long-term debt. SMEs create a capital structure based on pecking order theory.
Contribution: The study of the capital structure of SMEs in the commercial sector is one of the first studies of its kind in the Polish literature. It empirically verifies the most important theories on capital structure in the context of commercial companies. A similar verification of capital structure factors in the sector was also done.
Downloads
References
Abdou H.A., Kuzmic A., Pointon J., Lister R.J. (2012), Determinants of Capital Structure in the UK Retail Industry: A Comparison of Multiple Regression and Generalized Regression Neural Network, „Intelligent Systems in Accounting, Finance and Management”, vol. 19(3), https://doi.org/10.1002/isaf.1330.
Afriliyati N., Prihatini S., Yudhistira B.S., Nainggolan P., Aprilia D., Gusni (2022), Determinants of Capital Structure: Empirical Study of Consumer Goods Listing Firm in Indonesia Capital Market, „Central Asia & the Caucasus”, vol. 23(1).
Akgül E.F., Sigali S. (2018), Determinants of Capital Structure: An Application on BIST Transportation Index, „The Journal of Accounting and Finance”, vol. 77.
Amalia O.H., Nur D.I. (2019), Capital Structure Analysis of the Company: Empirical Evidence in the Retail Trade Sector in Indonesia Stock Exchange, „Indonesian Journal of Business and Economics”, vol. 2(2), https://doi.org/10.25134/ijbe.v2i2.2538.
Amanda R.I. (2019), The Impact of Cash Turnover, Receivable Turnover, Inventory Turnover, Current Ratio and Debt to Equity Ratio on Profitability, „Journal of Research in Management”, vol. 2(2).
Barclay M.J., Smith C.W. Jr, Morellec E. (2006), On the Debt Capacity of Growth Options, „The Journal of Business”, vol. 79(1), https://doi.org/10.1086/497404.
Cappa F., Cetrini G., Oriani R. (2020), The Impact of Corporate Strategy on Capital Structure: Evidence from Italian Listed Firms, „The Quarterly Review of Economics and Finance”, vol. 76, https://doi.org/10.1016/j.qref.2019.09.005.
Cassar G., Holmes S. (2003), Capital Structure and Financing of SMEs: Australian Evidence, „Accounting & Finance”, vol. 43(2), https://doi.org/10.1111/1467-629X.t01-1-00085.
Cortez M.A., Susanto S. (2012), The Determinants of Corporate Capital Structure: Evidence from Japanese Manufacturing Companies, „Journal of International Business Research”, vol. 11(3).
Cotei C., Farhat J.B., Abugri B.A. (2009), Market Efficiency in Emerging Markets: Does the Legal System Matter?, Available at SSRN 1404572, http://dx.doi.org/10.2139/ssrn.1404572.
Cressy R. (2006), Why Do Most Firms Die Young?, „Small Business Economics”, vol. 26(2), https://doi.org/10.1007/s11187-004-7813-9.
Czekaj J., Dresler Z. (2012), Zarządzanie finansami przedsiębiorstw, Wydawnictwo Naukowe PWN, Warszawa.
Czerwonka L. (2017), Struktura kapitału polskich spółek w świetle wybranych teorii, „Współczesna Gospodarka”, vol. 8(1).
Dasilas A., Papasyriopoulos N. (2015), Corporate Governance, Credit Ratings and the Capital Structure of Greek SME and Large Listed Firms, „Small Business Economics”, vol. 45(1), https://doi.org/10.1007/s11187-015-9648-y.
DeAngelo H., Masulis R.W. (1980), Optimal Capital Structure under Corporate and Personal Taxation, „Journal of Financial Economics”, vol. 8(1), https://doi.org/10.1016/0304-405x(80)90019-7.
Degryse H., Goeij P. de, Kappert P. (2012), The Impact of Firm and Industry Characteristics on Small Firms’ Capital Structure, „Small Business Economics”, vol. 38(4), https://doi.org/10.1007/s11187-010-9281-8.
Feng W. (2022), Determinant Factors of Capital Structure of Firms – an Empirical Analysis Based on Evidence from Chinese Listed Retail Companies, „Management Studies”, vol. 10(1), doi.org/10.17265/2328-2185/2022.01.004.
Feng Y., Hassan A., Elamer A.A. (2020), Corporate Governance, Ownership Structure and Capital Structure: Evidence from Chinese Real Estate Listed Companies, „International Journal of Accounting & Information Management”, vol. 28(4), https://doi.org/10.1108/ijaim-04-2020-0042.
Gupta M.C. (1969), The Effect of Size, Growth, and Industry on the Financial Structure of Manufacturing Companies, „The Journal of Finance”, vol. 24(3), https://doi.org/10.2307/2325350.
Hall G.C., Hutchinson P.J., Michaelas N. (2004), Determinants of the Capital Structures of European SMEs, „Journal of Business Finance & Accounting”, vol. 31(5–6), https://doi.org/10.1111/j.0306-686X.2004.00554.x.
Harris M., Raviv A. (1991), The Theory of Capital Structure, „The Journal of Finance”, vol. 46(1), https://doi.org/10.1111/j.1540-6261.1991.tb03753.x.
Hirdinis M. (2019), Capital Structure and Firm Size on Firm Value Moderated by Profitability, „International Journal of Economics and Business Administration”, vol. 7(1), https://doi.org/10.35808/ijeba/204.
Identyfikacja instrumentów wsparcia dla rozwoju sektora handlu. Raport branżowy (2020), PARR.
Jędrzejczak-Gas J. (2013), Struktura kapitału w małych i średnich przedsiębiorstwach, „Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia”, nr 62.
Jiang S. (2022), A Survey of Research on the Effect of Tangible Assets on Capital Structure (w:) Proceedings of the 2022 International Conference on Business and Policy Studies, CONF-BPS 2022. Applied Economics and Policy Studies, X. Li, C. Yuan, I. Ganchev (eds), Springer, Singapore.
Kara E., Erdur D.A. (2015), Determinants of Capital Structure: A Research on Sectors That Contribute to Exports in Turkey, „İstanbul Üniversitesi İşletme Fakültesi Dergisi”, vol. 44(2).
Kędzior M. (2012), An Empirical Examination of Microeconomic Capital Structure Determinants: Evidence from European Publicly Traded Manufacturers, „Argumenta Oeconomica Cracoviensia”, nr 8.
Lee J.H., Kim S.S. (2017), Capital Structure Adjustment in Korean Retail Firms, „Journal of Distribution Science”, vol. 15(11), https://doi.org/10.15722/jds.15.11.201711.41.
López-Gracia J., Sogorb-Mira F. (2008), Testing Trade-off and Pecking Order Theories Financing SMEs, „Small Business Economics”, vol. 31(2), https://doi.org/10.1007/s11187-007-9088-4.
Mac an Bhaird C., Lucey B. (2010), Determinants of Capital Structure in Irish SMEs, „Small Business Economics”, vol. 35(3), https://doi.org/10.1007/s11187-008-9162-6.
Mateev M., Poutziouris P., Ivanov K. (2013), On the Determinants of SME Capital Structure in Central and Eastern Europe: A Dynamic Panel Analysis, „Research in International Business and Finance”, vol. 27(1), https://doi.org/10.1016/j.ribaf.2012.05.002.
Mądra-Sawicka M., Kalisiak A. (2018), Zróżnicowanie struktury kapitału oraz jej determinant w spółkach kapitałowych według wybranych działów klasyfikacji NAICS, „Finanse, Rynki Finansowe, Ubezpieczenia”, nr 2(92), https://doi.org/10.18276/frfu.2018.92-11.
McConnell J.J., Servaes H. (1995), Equity Ownership and the Two Faces of Debt, „Journal of Financial Economics”, vol. 39(1), https://doi.org/10.1016/0304-405X(95)00824-X.
Miller M.H. (1988), The Modigliani-Miller Propositions after Thirty Years, „Journal of Economic Perspectives”, vol. 2(4), https://doi.org/10.1257/jep.2.4.99.
Mukaddam S., Sibindi A.B. (2020), Capital Structure and Financial Performance of Retail Firms: Empirical Evidence from South Africa, „Acta Universitatis Danubius. Oeconomica”, vol. 16(5).
Nunes P.J.M., Serrasqueiro Z.M. (2007), Capital Structure of Portuguese Service Industries: A Panel Data Analysis, „The Service Industries Journal”, vol. 27(5), https://doi.org/10.1080/02642060701411690.
Ozkan A. (2001), Determinants of Capital Structure and Adjustment to Long Run Target: Evidence from UK Company Panel Data, „Journal of Business Finance & Accounting”, vol. 28(1–2), https://doi.org/10.1111/1468-5957.00370.
Palacín-Sánchez M.J., Ramírez-Herrera L.M., di Pietro F. (2013), Capital Structure of SMEs in Spanish Regions, „Small Business Economics”, vol. 41(2), https://doi.org/10.1007/s11187-012-9439-7.
Petersen M.A., Rajan R.G. (1994), The Benefits of Lending Relationships: Evidence from Small Business Data, „The Journal of Finance”, vol. 49(1), https://doi.org/10.1111/j.1540-6261.1994.tb04418.x.
Pettit R.R., Singer R.F. (1985), Small Business Finance: A Research Agenda, „Financial Management”, vol. 14(3).
Prędkiewicz K., Prędkiewicz P. (2014), Wybrane determinanty struktury kapitału mikro, małych i średnich przedsiębiorstw w Polsce, „Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia”, nr 65.
Raport o stanie sektora małych i średnich przedsiębiorstw w Polsce 2021 (2021), PARP, Warszawa.
Sarioğlu S.E., Kurun E., Güzeldere H. (2013), Sermaye Yapısının Belirleyicileri: İMKB’de İşlem Gören Çimento, Otomotiv ve Bilişim Sektörlerinin Sermaye Yapısı Analizi, „Ege Academic Review”, vol. 13(4), https://doi.org/10.21121/eab.2013418082.
Serrasqueiro Z.S., Armada M.R., Nunes P.M. (2011), Pecking Order Theory versus Trade-off Theory: Are Service SMEs’ Capital Structure Decisions Different?, „Service Business”, vol. 5(4), https://doi.org/10.1007/s11628-011-0119-5.
Sheikh J., Shakeel A.W., Iqbal W., Tahir M.M. (2012), Pecking at Pecking Order Theory: Evidence from Pakistan’s Non-financial Sector, „Journal of Competitiveness”, vol. 4(4), https://doi.org/10.7441/joc.2012.04.06.
Sogorb-Mira F. (2005), How SME Uniqueness Affects Capital Structure: Evidence from a 1994–1998 Spanish Data Panel, „Small Business Economics”, vol. 25(5), https://doi.org/10.1007/s11187-004-6486-8.
Sunjoko M.I., Arilyn E.J. (2016), Effects of Inventory Turnover, Total Asset Turnover, Fixed Asset Turnover, Current Ratio and Average Collection Period on Profitability, „Jurnal Bisnis dan Akuntansi”, vol. 18(1).
Szudejko M. (2013), Analiza zależności pomiędzy branżą a strukturą kapitału przedsiębiorstwa na podstawie wyników finansowych polskich spółek giełdowych, „Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia”, nr 62.
Tazvivinga J.E., Mouton M.M., Pelcher L. (2021), Determinants of Capital Structure for Listed Retailing Firms on the JSE, „The Retail and Marketing Review”, vol. 17(1).
Umer U.M. (2013), Determinants of Capital Structure: Empirical Evidence from Large Taxpayer Share Companies in Ethiopia, „International Journal of Economics and Finance”, vol. 6(1), http://dx.doi.org/10.5539/ijef.v6n1p53.
Yıldırım D., Eyceyurt T. (2012), Sermaye yapısını etkileyen faktörler: gıda sektöründe bir uygulama, 16. Finans Sempozyumu Bildiriler Kitabı.
