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Capital structure in new technology-based firms : evidence from the Irish software sector
Author(s)
Date Issued
2004
Date Available
2009-06-10T13:33:33Z
Abstract
Using a sample of 117 Irish software companies, we examine the capital structure of new technology-based firms. Consistent with the findings on financing for other small businesses, internal funds are the most important source of funding in new technology-based firms. However, in apparent contradiction to the pecking order hypothesis, the use of debt is rare and equity financing is the prime source of external finance. By questioning chief executive officers via survey on their perceptions and opinions on various financing issues, we are able to conclude that in many cases software firm founders prefer outside equity to debt. The dearth of debt in the capital structure of new technology-based firms cannot be wholly explained by financing constraints due to information asymmetries in the banking sector.
Type of Material
Working Paper
Publisher
University College Dublin. School of Business. Centre for Financial Markets
Series
Centre for Financial Markets working paper series
WP-04-19
Copyright (Published Version)
2004, Centre for Financial Markets
Classification
G24
G28
G37
Subject – LCSH
Computer software industry--Ireland
Small business--Finance
Capital
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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