Swedish SME Financing - Evidence from the Game Industry

Sammanfattning: The objective of this thesis is to examine the capital structure of Swedish small and medium sized enterprises (SMEs). Accounting data from Swedish game developers, combined with the result from a survey, is used to examine their financial conditions and capital structure decisions. We find that non-debt tax shield, firm size, growth opportunities and age are, to various extents, the determinants of capital structure in the game industry, while effective tax rate and asset structure have marginal effects. Our study also implicates that most of the existing capital structure theories can explain SMEs leverage decisions to some extent; however, some adaptation is needed to fit these theories into the SME context. Additionally, we find the existence of a financial gap in the game industry which might need efforts from both demand side and supply side to eliminate.