Financial crisis and SME capital structure: Swedish empirical evidence

Purpose The purpose of this paper is to empirically examine capital structure determinants of small- and medium-sized enterprises (SMEs) during and after the global financial crisis. Design/methodology/approach Statistical methods, including ordinary least squares and the generalised method of moments, were used to analyse a sample of over 40,800 Swedish SMEs operating in four industries during the 2008-2015 period. Findings The results indicate that the independent variables - i.e. financial crisis, profitability, size, tangibility and industry affiliation - to various degrees explain changes in short-term debt (STD) and long-term debt (LTD) ratios. In particular, the empirical findings indicate that the sampled SMEs tended to rely more on STD and LTD during (2008-2009) than after (2010-2015) the financial crisis. Originality/value This study is one of few examining determinants of short- and long-term SME debt during and after the global financial crisis, using data from a large-scale cross-sectional database.