The Crossroads of Capital Structure: Evidence from Swedish Listed and Non-listed SMEs

Sammanfattning: The financing of firms is subject to internal investment decisions but affected by external forces. This creates agency costs which have different effect on different firms. As small firms do not exhibit the same attributes as larger, public firms, studied more intensely, they are not affected equally by the costs. This thesis examines a sample of Swedish SMEs between the years 1999 and 2015 by dividing the sample into a listed and non-listed sample. Through mean difference tests it is found that non-listed SMEs finance with more debt. Through regressions the effects are attributed to size, tangibility, profitability, and non-debt tax shields. However, the effect of tangibility on long-term debt is the most prominent determinant and concluded to have the largest effect on the difference in capital structure between listed and non-listed SMEs.