Small Firm Financing: Implications from a Strategic Management Perspective

摘要: The main thesis of this article is that a corporate strategy perspective (which includes managerial choice) may be superior to traditional finance in explaining small firm financing decisions. tries explain complex financial decision process (e.g., optimal debt level) without fully considering the impact choice. It likely, however, choice exerts considerable influence on Thus, new paradigm needed which many factors are part process, among them: goals, risk aversion, and internal constraints. Such would: (1) allow for more complete understanding process; (2) address needs concerns practitioner; (3) provide sound basis future empirical research. Recent literature has attempted decisions using modern theory. For example, McConnell Pettit' suggest businesses generally have proportionally less than large firms. They propose so because: firms lower marginal tax rates larger (suggesting deduction benefit debt); higher bankruptcy costs increases find it difficult "signal" their business health creditors (therefore raising "cost" firms). Another attempt behavior relies agency theory.2 Agency theory holds people who equity or require monitor investment funds by management owner (i.e., costs). This view suggests based owner/ manager being able assess these costs" each type financing, then selecting lowest-cost method firm's activities. One weakness explanation no one yet been measure costs, even Nor cost (or any other theory) capital structure large, public firms, let alone small, private ones.3 In contrast, recent theoretical work strategic multiple objectives promise objective use as developing propositions-and research paradigm-to management. First, Barton Gordon argument applicability reviewed.5 Second, argument's validity relevance applied assessed. Third, propositions regarding developed. Finally, follow-up proposed. THE CASE FOR A STRATEGY PERSPECTIVE point out while an important aspect strategy, neither nor provided useful guidance practitioners academics decision.6 not permit adequate representation at individual level. unrealistic assumptions made models, note rational economic entity with singular goal shareholder wealth maximization oversimplification. following characteristics must accounted decisions: level; fact open systems context top management; consistent overall plan; (4) reflects environmental factors, all nature. …