An empirical investigation of the growth cycle theory of small firm financing

Brian T Gregory, Matthew W. Rutherford, Sharon Oswald, Lorraine Gardiner

Research output: Contribution to journalArticle

93 Citations (Scopus)

Abstract

This paper empirically tests the financial growth cycle model for small and medium-sized enterprises (SMEs), which postulates that as firms become larger, older, and more informationally transparent, their financing options become more attractive. We add to the literature by providing one of the first empirical tests of the model using a large, cross-sectional data set. Our results partially support the financial growth cycle model. Specifically, our results show larger firms, as measured by total number of employees, are more likely to use public equity funding or long-term debt as opposed to insider funding.

Original languageEnglish (US)
Pages (from-to)382-392
Number of pages11
JournalJournal of Small Business Management
Volume43
Issue number4
DOIs
StatePublished - 2005
Externally publishedYes

Fingerprint

Personnel
Empirical investigation
Financing
Growth cycle
Small firms
Industry
Funding
Large firms
Cross-sectional data
Empirical test
Employees
Small and medium-sized enterprises
Equity
Insider
Long-term debt

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)

Cite this

An empirical investigation of the growth cycle theory of small firm financing. / Gregory, Brian T; Rutherford, Matthew W.; Oswald, Sharon; Gardiner, Lorraine.

In: Journal of Small Business Management, Vol. 43, No. 4, 2005, p. 382-392.

Research output: Contribution to journalArticle

Gregory, Brian T ; Rutherford, Matthew W. ; Oswald, Sharon ; Gardiner, Lorraine. / An empirical investigation of the growth cycle theory of small firm financing. In: Journal of Small Business Management. 2005 ; Vol. 43, No. 4. pp. 382-392.
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