D. van der Wijst
The subject of this book is the small firm's financial structure and the differences in financial structure that can be observed both within and between small business industries. After an introductory description of small business (financial) characteristics possible determinants of financial structure are collected from the theoretical and practical literature. The relevance of these determinants for small business is empirically tested and the applicability of the results is investigated. In the empirical investigations, 14 cross section samples and 2 time series of industry averages are analysed, using techniques that are still relatively unknown to financial analysts. Traditional ratio analysis is argued to be an inadequate technique to apply the results and a new approach is developed. The book provides new insights about the robustness of well known theoretical models, the similarities and differences between the theoretical and practical determinants of small business finance, the empirical relevance of determinants of the financial structure and the applicability of complex research outcomes to small firm management.