Summary: | Small and medium-sized enterprises (SME) play a special role in the modern economy.
At the same time, the difficulty in accessing sources of financing is the main
barrier limiting the development of this sector. Despite this, studies of the capital
structure of SMEs are performed less frequently than among large enterprises. The
aim of this paper is to examine which capital structure theory best explains the
financial decisions of SMEs in Poland. Additionally, an attempt is made to identify
the main firm-specific capital structure determinants. The research material
includes financial data from 2,820 SMEs in Poland operating in the 2011–2018
period. Static and dynamic panel models were applied to conduct the analysis.
The study found that most SMEs in Poland behave in accordance with the pecking
order theory. However, the results of testing the trade-off theory indicate that
there may be a group of companies seeking an optimal capital structure according
to the assumptions of this theory. The speed of adjustment is about 24%. The
study confirmed a positive relationship between SME indebtedness and firm size.
The same relationship was found for the growth rate. The opposite direction was
identified for tangibility and liquidity.
|