The financial structure of Technology-Based Firms

GUERCIO, M. BELEN; BRIOZZO, ANAHI, E.; VIGIER, HERNÁN, P.; MARTINEZ, LISANA B.

Revista Contabilidade & Finanças

Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade, Departamento de Contabilidade e Atuária

Lugar: São Paulo; Año: 2020

1808-057X

This study aims to analyze the evolution of financial structure in Technology-Based Micro, Small and Medium-SizedEnterprises (MSMEs) throughout their business cycle. The papers analyzing financial structure in Technology-BasedMSMEs focus on developed countries, with strong institutional environments, economic stability, and developed financialmarkets. This study contributes to bridging the literature gap in knowledge regarding financial structure in TechnologyBased MSMEs in economies with small and underdeveloped financial markets and those with recurring economic crises.These issues intensify the limitations of access to financing for these companies and their potential growth. The importanceof Technology-Based companies not only lies on their contribution to economic growth, but they are regarded as channelsthrough which scientific knowledge is applied to products, processes, and services, improving the quality of life of society as awhole. The results evidenced in this study indicate the need to devise policies focused on encouraging access to funding in thevarious stages of the business cycle of Technology-Based MSMEs. A database with 89 Argentine Technology-Based MSMEsis used, applying an Ordered Logit model to analyze the variables affecting financial diversification in these companies. Theresults confirm the predictions of the financial growth cycle of small business theory, which argues that company size andage affect the probability of diversifying the financial structure. At the same time, this work found that these variables havea different effect depending on the stage in life cycle that a company is going through.