IDLab workshop in collaboration with ECOBAS: "The impact of credit supply on capital structure of SMEs in Spain"

Abstract
This paper analyzes the impact of credit supply on capital structure of Spanish SMEs over the 2014-2022 period. This subject is relatively innovative in capital structure research, since the few papers which studied the effect of credit supply on capital structure focused on listed and larger firms and/or on sample periods including the great financial crisis and subsequent credit crunch. For the empirical analysis, panel data methods are applied to a sample of 7,172 firms for the period 2014–2022. Our results show that credit supply has a positive impact on leverage ratios of Spanish SMEs. In addition, within the Spanish SMEs, capital structure decisions of bigger firms are less subject to the credit cycle than smaller firms. Regarding the control demand variables, our results are consistent with previous studies and with the main theories of capital structure. Assets tangibility presents a positive relationship with leverage, while profitability and volatility of earnings present a negative relationship with leverage.

Language: English

Format: Zoom

If you want to participate, please email to ea_popova@hse.ru