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Cited by 8Corporate Finance and GovernanceWorking Capital and Financial PerformanceFinancial Analysis and Corporate Governance

The importance of owner loans for rebalancing the capital structure of small knowledge-intensive service firms

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Sardo, Filipe, Serrasqueiro, Zélia, Armada, Manuel Rocha·2022·Research in International Business and Finance
DOI 10.1016/j.ribaf.2022.101657
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Abstract

The purpose of this study is to analyze the financing behaviors of young and old small knowledge-intensive service (SKIS) firms, giving particular attention to the relationship between owner loans and the level of indebtedness and to the effect of owner loans on rebalancing the capital structure of such firms. Using dynamic panel data, this study used two samples, one with 421 young SKIS firms and another with 1353 old SKIS firms. Based on the findings, the financing behaviors of both the young and old firms closely resembled the predictions of the pecking order theory. However, the young SKIS firms attempted to rebalance their capital structure, being able to renegotiate credit under favorable terms, while the old SKIS firms slowly adjusted, suggesting the presence of high transaction costs. Regarding owner loans, they positively impacted the adjustment speed, with greater magnitude on the old SKIS firms.

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Authors
Sardo, F., Serrasqueiro, Z., & Armada, M. R.
Affiliations
University of Beira Interior (PT)
Corresponding author
Serrasqueiro, Zélia
ORCID
Venue
Research in International Business and Finance
Publisher
Elsevier BV
Published
2022-10
Volume
61
Pages
101657
ISSN
0275-5319 (ISSN-L)
DOI
10.1016/j.ribaf.2022.101657
OpenAlex
W4224082798
Cited by
8
References
77
Citations by year
2026: 1 · 2025: 1 · 2024: 4 · 2023: 1 · 2022: 1
FWCI
3.17
Type
journal article
Language
en
Open access
Licence
Locations
  • Research in International Business and Finance (publishedVersion, cc-by-nc-nd)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
Fundação para a Ciência e a Tecnologia (UIDB/03182/2020, UIDB/04007/2020)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
capital structure, pecking order theory, debt renegotiation, transaction costs, firm age, financing behavior

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