Topic
Debt capital
About: Debt capital is a research topic. Over the lifetime, 513 publications have been published within this topic receiving 11989 citations.
Papers published on a yearly basis
Papers
Posted Content•
TL;DR: In this paper, the authors investigate small business longevity and financial capital structure using owner human capital measures and demographic traits as explanatory variables, including education level achieved, family background, and age of owner at business start.
Abstract: Investigates small business longevity and financial capital structure using owner human capital measures and demographic traits as explanatory variables, including education level achieved, family background, and age of owner at business start. Data were obtained from a nationwide random sample of 4,429 non-minority males who started businesses between 1976 and 1982, drawn from the U.S. 1982 Characteristics of Business Owners (CBO) survey. Those firms still in operation in 1986 were identified. Results demonstrate that educational level is the most significant human capital variable for identifying business continuance. Also, age of owner was correlated to a lessening of owner effort--therefore, the older the owner is at startup (55 and older) the less likely a firm is to remain in operation. In addition, owners that purchased existing firms are more likely to remain in business than those that started a new venture. Further, owner educational background is a major indicator of the financial capital structure of new firms. Nearly all of the businesses analyzed received no equity capital from organized financial markets, but did have access to debt capital, and those with higher educational level received larger bank loans. Dependence on debt capital, from commercial banks or family and friends, for startup financing is not an accurate gauge of high failure risk. The importance of human versus financial capital as a factor in firm continuance remains unclear. (SFL)
1,308 citations
TL;DR: In this paper, the authors investigated small business longevity using a nationwide random sample of males who entered self-employment between 1976 and 1982 and found that highly educated entrepreneurs are most likely to create firms that remained in operation through 1986.
Abstract: Small business longevity is investigated utilizing a nationwide random sample of males who entered self-employment between 1976 and 1982. Highly educated entrepreneurs are most likely to create firms that remained in operation through 1986. Owner educational background, further, is a major determinant of the financial capital structure of small business startups. Financial capital endogeneity notwithstanding, firms with the larger financial investments at startup are consistently overrepresented in the survivor column. Firm leverage, finally, is trivial for delineating active from discontinued businesses. Reliance upon debt capital to finance business startup is clearly not associated with heightened risk of failure. Copyright 1990 by MIT Press.
1,198 citations
TL;DR: Barber et al. as discussed by the authors analyzed the impact of a firm's environmental profile on its cost of equity and debt capital using implied cost of capital derived from analysts' earnings estimates and found that investors demand significantly higher expected returns on stocks excluded by environmental screens such as hazardous chemical, substantial emissions, and climate change concerns compared to firms without such environmental concerns.
Abstract: Ianalyze the impact of a firm's environmental profile on its cost of equity and debt capital. Using implied cost of capital derived from analysts' earnings estimates, I find that investors demand significantly higher expected returns on stocks excluded by environmental screens such as hazardous chemical, substantial emissions, and climate change concerns compared to firms without such environmental concerns. Lenders also charge a significantly higher interest rate on the bank loans issued to firms with these environmental concerns. I provide evidence that the environmental profile of a firm is not simply proxying for an omitted component of its default risk. Further, firms with these environmental concerns have lower institutional ownership and fewer banks participate in their loan syndicate than firms without such environmental concerns. These results suggest that exclusionary socially responsible investing and environmentally sensitive lending can have a material impact on the cost of equity and debt capital of affected firms.
This paper was accepted by Brad Barber, finance.
1,164 citations
TL;DR: The authors found that female entrepreneurs have a smaller amount of start-up capital, but that they do not differ significantly with respect to the type of capital they had access to, and that the proportion of equity and debt capital in the businesses of female entrepreneurs is the same as in those of their male counterparts.
Abstract: Female and male entrepreneurs differ in the way they finance their businesses. This difference can be attributed to the type of business and the type of management and experience of the entrepreneur (indirect effect). Female start-ups may also experience specific barriers when trying to acquire start-up capital. These may be based upon discriminatory effects (direct effect). Whether gender has an impact on size and composition of start-up capital and in what way, is the subject of the present paper. The indirect effect is represented by the way women differ from men in terms of type of business and management and experience. The direct effect cannot be attributed to these differences and is called the gender effect. We use of a panel of 2000 Dutch starting entrepreneurs, of whom approximately 500 are female to test for these direct and indirect effects. The panel refers to the year 1994. We find that female entrepreneurs have a smaller amount of start-up capital, but that they do not differ significantly with respect to the type of capital. On average the proportion of equity and debt capital (bank loans) in the businesses of female entrepreneurs is the same as in those of their male counterparts.
744 citations
Posted Content•
TL;DR: In this paper, the strength of firm-creditor relationships and their effects on both the availability and price of credit were examined using data from the National Survey of Small Business Finance collected in 1988 and 1989.
Abstract: Previous studies on the benefits of firm-creditor relationships have focused on whether close ties between firms and their banks help ensure credit for firms, even during difficult financial times. This study considers the strength of firm-creditor relationships and their effects on both the availability and price of credit. Data were used from the National Survey of Small Business Finance collected in 1988 and 1989 by the U.S. Small Business Administration and the Federal Reserve System on 3,404 firms with fewer that 500 employees. Firm borrowing patterns, including number of lenders utilized, size of loans, and loan rates, were examined. Other lender relationship factors were identified, including use of nonloan services with the lending institutions (such as checking and savings accounts), and length of the relationship. Findings show that close relationships between firms and institutional lenders increase the availability and, to a lesser extent, reduce the price of credit to firms. The importance of relationships with lenders is further demonstrated in that borrowing from multiple lenders increases costs and reduces the availability of financing. (SFL)
740 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 16 |
| 2020 | 32 |
| 2019 | 38 |
| 2018 | 29 |
| 2017 | 31 |
| 2016 | 30 |