Cross‐industry differences in SME financing behaviour: An Australian perspective
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 1 June 2005
Abstract
Purpose
Aims to ascertain the extent to which industry appears to influence the financing behaviour of a sample of Australian small and medium‐sized enterprises (SMEs).
Design/methodology/approach
The research employs data for several thousand SMEs taken from the Australian federal government's Business Longitudinal Survey undertaken over four financial years from 1994‐1995 to 1997‐1998. The principal analytical technique employed is logistic regression modelling with various financial structure measures as dependent variables, and with industry as the independent variable of central interest.
Findings
The research findings reported in the paper provide substantial empirical evidence that cross‐industry differences in financing behaviour do exist even after controlling for other relevant influences on SME financing choices such as enterprise size, business age, profitability, growth, asset structure and risk. The key finding is that industry does not simply proxy for one or more of these other factors, but is an important influence in its own right.
Research limitations/implications
There are evidently effects arising from the fundamental nature of industries that require better understanding before a reliable prescriptive position on SME financing can be reached. What these effects are cannot really be ascertained using the research data and methods employed in this study, which give a relatively superficial perspective on the matter. A need for more in‐depth qualitative investigation is indicated.
Originality/value
The main implication of this research for scholars and policy‐makers concerned with SMEs is clearly the need to regard industry as an important independent influence on financing behaviour.
Keywords
Citation
Johnsen, P.C. and McMahon, R.G.P. (2005), "Cross‐industry differences in SME financing behaviour: An Australian perspective", Journal of Small Business and Enterprise Development, Vol. 12 No. 2, pp. 160-177. https://doi.org/10.1108/14626000510594584
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited