Reflection of owner’s attributes in financing decisions of SMEs.
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| Authors: | Rao, Purnima1 (AUTHOR), Kumar, Satish2 (AUTHOR) scholar.satish@gmail.com |
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| Source: | Small Enterprise Research. Apr2018, Vol. 25 Issue 1, p52-68. 17p. |
| Subject Terms: | *Small business finance, *Executives, *Questionnaires, *Regression analysis, Exploratory factor analysis |
| Abstract: | The purpose of the study is to examine the influence of demand side factors on the financing preferences of small and medium-sized enterprises (SMEs). Demand side factors include SME owner/manager’s business goal, attitude towards risk and control over business, networking ties and their personal attributes. The study uses a structured questionnaire designed with the help of previous studies. A total of 309 valid responses are analysed to accomplish the research objectives. The study uses various statistical techniques namelyk-means cluster analysis, exploratory factor analysis and hierarchical regression. The study uses a segmentation approach and classifies the respondents into three categories – risk avoiders, growth seekers and steady players. Furthermore, the results reveal the importance of personal attributes and networking ties of SME owner/manager with banks and suppliers. The study contributes to the extant literature of SME financing and highlights the influence of demand side factors on financing preferences of SMEs. The study also provides a new and rational angle of examining the financing preferences of SMEs. It highlights the need for awareness amongst SME owner/manager towards their behaviour and its impact on the financing decisions of firms. [ABSTRACT FROM AUTHOR] |
| Database: | Entrepreneurial Studies Source |
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| Abstract: | The purpose of the study is to examine the influence of demand side factors on the financing preferences of small and medium-sized enterprises (SMEs). Demand side factors include SME owner/manager’s business goal, attitude towards risk and control over business, networking ties and their personal attributes. The study uses a structured questionnaire designed with the help of previous studies. A total of 309 valid responses are analysed to accomplish the research objectives. The study uses various statistical techniques namelyk-means cluster analysis, exploratory factor analysis and hierarchical regression. The study uses a segmentation approach and classifies the respondents into three categories – risk avoiders, growth seekers and steady players. Furthermore, the results reveal the importance of personal attributes and networking ties of SME owner/manager with banks and suppliers. The study contributes to the extant literature of SME financing and highlights the influence of demand side factors on financing preferences of SMEs. The study also provides a new and rational angle of examining the financing preferences of SMEs. It highlights the need for awareness amongst SME owner/manager towards their behaviour and its impact on the financing decisions of firms. [ABSTRACT FROM AUTHOR] |
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| ISSN: | 13215906 |
| DOI: | 10.1080/13215906.2018.1428908 |
