On the Theory of Finance for Privately Held Firms
Open accessAbstract
This paper is a first attempt at differentiating the problems of finance of the privately held small businesses from their larger counterparts. Small businesses, though not concerned with the problems and opportunities associated with publicly traded firms, have different types of complexities, such as shorter expected life, presence of estate tax, intergenerational transfer problems, and prevalence of implicit contracts. Some standard problems like agency and asymmetric information are also more complex. The relatively high transaction costs faced by small businesses in all types of financial decisions also preclude a sizable subset of available choices.
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The use of personal assets to help with external finance highlights the financial intertwining of owners and their businesses.
“This use of personal assets to help with external ®nance also highlights another important aspect of small business ®nance ± the ®nancial intertwining of owners and their businesses (Ang, 1992).”
From The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle (1998) · cites this paper as Ang, 1992
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Research works printed but not linked: 7
- Ang, J. S., "Small Business Uniqueness and the Theory of Financial Management," Journal of Small Business Finance^ Volume 1, 1991.
- Bates, T., "Financial Capital Structure and Small Business Viability," in Advances in Small Business Finance, Rassoul Yazdipour (ed.), Kluwer Academic Publishers: Dordrecht, Netherlands, 1991.
- Berkovitch, E. and E. H. Kim, "Financial Contracting and Leverage Induced Over-sp and Under-Investment Incentives," Journal of Financey Volume 45, July 1990, pp. 765- 794.
- Myers, S. C., "Determinants of Corporate Borrow^ing," Journal of Financial Economics, Volume 5, 1977, pp. 147-175.
- Ou, Charles, "The Debt-Equity Relationship for Small Business-An Alternative Explanation," paper presented at the Third Annual Symposium on Small Business Finance, April 1991.
- Walker, D. A., "An Empirical Analysis of Financing the Small Firm," in Advances in Small Business Finance, Rassoul Yazdipour (ed.), Kluwer Academic Publishers: Dordrecht, Netherlands, 1991.
- Yazdipour, R. and R. Constand, "The State of Research in the Field of Small Business Finance," paper presented at the Third Annual Symposium on Small Business Finance, April 1991.
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N. Berger, A., & F. Udell, G. (1998) · Journal of Banking & Finance · doi:10.1016/s0378-4266(98)00038-7 · Cited by 3,690 · see citing works
Sardo, F., Serrasqueiro, Z., & Armada, M. R. (2022) · Research in International Business and Finance · doi:10.1016/j.ribaf.2022.101657 · Cited by 8 · see citing works
- Authors
- Ang, J. S.
- Affiliations
- Pepperdine University (US)
- Corresponding author
- Ang, James S.
- ORCID
- Ang, James S.
- Venue
- The Journal of Entrepreneurial Finance
- Publisher
- Pepperdine Libraries
- Published
- 1992-12-01
- Volume
- 1
- Issue
- 3
- Pages
- 185-203
- ISSN
- 2373-1753 (ISSN-L)
- 2373-1761
- OpenAlex
- W91480530
- Cited by
- 487
- References
- 0
- Citations by year
- 2026: 5 · 2025: 7 · 2024: 9 · 2023: 11 · 2022: 14 · 2021: 17 · 2020: 23 · 2019: 12 · 2018: 22 · 2017: 17 · 2016: 30 · 2015: 28 · 2014: 21 · 2013: 28 · 2012: 40
- FWCI
- 15.79
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Entrepreneurial Finance (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Econstor (Econstor) (submittedVersion)
- Pepperdine Digital Commons (Pepperdine University) (submittedVersion)
- DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion)
- 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 › Private Equity and Venture Capital
- Keywords
- private enterprises, small business financing, estate tax, intergenerational transfers, implicit contracts, principal-agent problem, information asymmetry, transaction costs, firm life cycle, entrepreneurial finance
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