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The aim of this paper is to examine the degree to which the determinants of SMEs' capital structures differ between European countries. The study is based on data for four thousand SMEs, five hundred from each of eight European countries. Regressions were run using short-term and long-term debt as dependent variables and profitability, growth, asset structure, size and age as independent variables. A key feature of this paper is the use of restricted and unrestricted regressions to isolate the country-effect from the firm-specificeffect. The results show that variations are likely to be due to country differences as well as firm-specific ones.

This paper reports a study of 3500 unquoted, UK small and medium sized enterprises (SMEs). The objectives of the research were to test various hypotheses concerning the determinants of SME capital structure and to establish whether and how the relationship of these determinants to long- and short-term debt varied between industries. Long-term debt was found to be related positively to asset structure and company size and negatively to age; short-term debt was related negatively to profitability, asset structure, size and age and positively to growth. Significant variation across industries was found in most of the explanatory variables. The effect of growth on short-term debt, however, was consistent across industries whilst profitability had no effect on long-term borrowing in any industry.Capital Structure, Industry Effects, Smes,

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GRAHAM HALL AND BARBARA YOUNG lecturer at Manchester Business School, Manchester University, England. This study represetns at attempt to add to the state of knowledge on why failure takes palce among small firms by drawing on the information contained in the reports of the offical receiver, all on cases of compulsory liquidation. The author say it is unlikely that the characteristics of the companies sufering compulsory liquidation will difer markedly from those experencing creditors's voluntary liquidation. the study's three samples, each of 100 reports at five year intervals, were drawn from involunatary liquidations in the London area. The authors conclude that governemnt initiatives to provide subsidised consultancy in marketing and planning should be extended to include adivce on operational management and suggest that closer attention shold be paid by leader to the emphasis which both owner and offical receivers put on under-capitalisation as a cause of failure.