Theories of financing for entrepreneurial firms: a review

Miglo, A. (2022) Theories of financing for entrepreneurial firms: a review. International Review of Entrepreneurship, 20(2), pp. 301-330.

Abstract

This article provides an overview of literature related to capital structure theories for entrepreneurial firms. It identifies gaps and controversial areas in existing literature and also discusses potential directions for future research. Credit rationing, signalling by risk-bearing, the learning market demand idea, and the flexibility theory of capital structure are consistent with many patterns of financing of entrepreneurial firms. Credit rationing is the dominant area of research. Several directions have emerged that need answers such as for example which channel of credit rationing represents its main driving force. More empirical research is expected in signalling by risk-bearing. More theoretical and empirical research is expected regarding learning market demand and flexibility ideas. Pecking-order theory and trade-off theory play a significant role in large corporations but not so much in SMEs. More research is required investigating modified versions of each theory.

• Item Type: Articles
• Status: Published
• Refereed: No
• Glasgow Author(s) Enlighten ID: Miglo, Dr Anton
• Authors: Miglo, A.
• Subjects: H Social Sciences > HG Finance
• College/School: College of Social Sciences > Adam Smith Business School
• Journal Name: International Review of Entrepreneurship
• Publisher: Senate Hall Academic Publishing
• ISSN: 2009-2822

Related URLs

• Author