Discussion and conclusions

Abstract

Notwithstanding the importance of SMEs to national economies in terms of employment, gross value added at factor cost, and numbers of enterprises, academic research on capital structure choice of firms in the sector is in its infancy. A belated interest in the subject has resulted in a burgeoning body of work. This literature first emerged from the US and the UK, although it now covers a wider geographic spread. Despite a proliferation of studies, there are a number of gaps in the literature, particularly a dearth of studies in the Irish context. A common theme in published papers considers the supply of funding to the sector, especially investigations of a so-called “funding gap”. Although capital structure is a function of both supply-side and demand-side factors, studies on the latter are comparably fewer. This study addresses these gaps in the literature.