Authors: Apostolos Dasilas, Georgios Bangoudis

Title: The capital structure of Greek SMEs

Abstract

This paper examines the capital structure of 26,335 Greek small-medium enterprises (SMEs) over the period 2014-2018. Employing static panel data regression analysis the determinants of total debt, short- and long-term debt are analyzed using the least squares method and taking into account fixed effects. As potential capital structure determinants, a gamut of independent variables is considered including firm size, profitability, tangibility, growth, age, credit rating, and auditor. The results from the regression analysis reveals that the impacts of capital structure determinants on SMEs leverage levels are different in terms of both magnitude and direction. In specific, the firm size and growth opportunities appear to have a positive impact on total and short-term debt. In contrast, profitability, tangibility and age exert a negative impact on debt levels. Finally, high credit ratings allow companies to make greater use of leverage as well as the hiring of an auditor from Big-4 companies. These results are partly congruent with both the trade-off and pecking order theories.