Financing structure of portuguese start-ups

Abstract

The context where the companies operate has become more challenging given the binomial competitiveness and financial crisis. Market imbalances are an opportunity to explore creative solutions that characterize Start-Ups’ profiles. However, its innovative character carries risks that determine major funding difficulties. This way this article aims to investigate the influence of a set of variables in the composition of the financial structure of Portuguese Start-Ups. The methodology used is based on a cross-sectional data, integrating multivariate regressions (Logit, Tobit, and OLS), enriched by panel data analysis. The results show that company’s size, assets structure and legal form are statistically relevant.

Determinants of Indebtedness in Expanding Portuguese Hotels

“…Regarding the lnDE and MLD ratios, the results supported hypotheses H2.1 and H3.1. On the one hand, this theory argues that larger firms are more diversified, have more stable cash flows and are less likely to fail, and thus, are more leveraged [6,7,24,25,[32][33][34]38,46]. On the other hand, the theory argues that firms with lower tangibility face more information asymmetry problems, offer less collateral to creditors and are, therefore, less leveraged [6,21,24,25,37,46,47].…”

“…TOT suggests a positive relationship between size and indebtedness. Larger firms are more diversified, have more stable cash flows and are less likely to default [31], allowing them to use more leverage [6,7,30,[32][33][34] and benefit from tax savings [21,[35][36][37]. In addition, [38] stated that these firms disclose more information, which is monitored by market analysts, and are therefore less exposed to the asymmetry problem, which allows them to issue cheaper debt.…”

“…These types of assets are easier to quantify [24], which justifies fewer information asymmetries and more guarantees in the event of financial difficulties. In addition, firms with more valuable tangible assets have a higher liquidation value and greater debt capacity [6,7,[34][35][36][37]39], and thus, achieve higher levels of investment [8].…”

“…The work of [34] aimed to investigate the influence of a set of variables in the composition of the financial structure of Portuguese start-ups. The methodology used was based on cross-sectional data that integrates multivariate regressions (logit, tobit and OLS), enriched by panel data analysis.…”