Abstract This paper investigates the determinants of capital structure and use financing for small medium sized enterprises. Hypotheses utilising static trade‐off pecking order arguments are empirically examined using a series firm characteristics including: size, asset structure, profitability, growth risk. The hypotheses developed tested large Australian nationwide panel survey. results suggest that profitability important financing. For direction influence is reliant upon or measure...

Abstract This paper longitudinally examines the relationship between career reasons of nascent entrepreneurs, their growth preferences and subsequent achieved. The longitudinal design allows for examination control both survivorship recall bias upon reason linkages. Substantial was observed in with reported importance self-realization financial success, as explanations entering venturing activity, being significantly lower when responses were obtained once venture operational. Consistent...

This research examines the rationality of expectations nascent entrepreneurs. Consistent with conjectures regarding entry into self-employment, I find substantial overoptimism in entrepreneurs' expectations, that they overestimate probability their activity will result an operating venture. Further, for those ventures achieve operation, individuals expected future sales and employment. To explain variations overoptimism, posit who adopt inside view to forecasting through use plans financial...

Abstract We empirically examine the effect of self‐efficacy on entrepreneurial investment choices. identify various attributes and argue that higher is associated with more aggressive decisions. show increases likelihood being a nascent entrepreneur creating an operating business. Self‐efficacy also proportion personal wealth invested in venture amount hours per week devotes to venture. These results are significant even when controlling for other known characteristics investment. Copyright...

We investigate the extent to which hedge fund managers smooth self-reported returns. In contrast prior research on “anomalous” properties of returns, we observe mechanisms used price fund's investment positions and report performance investors, thereby allowing us differentiate between asset illiquidity misreporting-based explanations. find that funds using less verifiable pricing sources provide with greater discretion in are more likely have returns consistent intentional smoothing....

Much of the empirical data that identifies incidence planning in small firms and variables associated with is based on samples subject to geographic industry constraints. The intent this article partially overcome those limitations by testing relationships using results from a large Australian-wide, multiple-period sample. For each three years, frequency which maintained documented business plans was determined tested for associations range traditional "business structure" demographic group...

ABSTRACT: Using a representative sample of entrepreneurs who are in the process starting business, this study investigates determinants preparation financial statements and projections start-up ventures. Consistent with predictions from information economics contracting, I find that use outside funding, level competition, venture scale positively associated intended frequency statement preparation. However, comparing economic significance alternative influences suggests benefit reducing...

We empirically examine the effect of self-efficacy on entrepreneurial investment choices. identify various attributes investment, and argue that higher is associated with more aggressive decisions. show increases likelihood both being a nascent entrepreneur creating an operating business. Self-efficacy also proportion personal wealth invested in venture amount hours per week devotes to venture. These results are significant even when controlling for other known characteristics investment. In...

ABSTRACT Complexity in applying financial accounting standards can have real operational effects if firms alter their actions response to increased reporting costs. We examine whether the introduction of ASU 2017‐12, designed reduce compliance burden and better align hedge rules with risk management practices, led more effective hedging. Using detailed hedging disclosures, we show that adopt expand use hedge‐accounted derivatives exposures interest rate foreign currency risks. ASU‐adopting...

A large sample of small firms was longitudinally surveyed to investigate the rationality revenue forecasts made within such firms. The analysis helps address dearth research investigating owner/managers' growth in and their degree accuracy. Contrary conventional expectations, results do not support contention that by managers are optimistic. Although systematic overestimation found, did tend make were generally too extreme, tended overextrapolate previous growth. These consistent with...

This study investigates the determinants of initial retention external accountants by new US startups. We test several arguments related to agency and credibility needs, financial activity complexity, accounting support advice. Consistent with complexity arguments, we find that intended scale bank account are positively associated both actual an accountant. Comparing decision retain accountant another professional service, retaining a lawyer, many same factors be significant. However,...

ABSTRACT: We investigate the determinants of hedge fund internal controls and their association with fees that funds charge investors. Hedge are subject to minimal regulation. Hence, managers voluntarily implement controls, investors freely contract on fees. find stronger in higher potential agency costs. Further, domiciled jurisdictions provide limited legal redress for fraud financial misstatements. Short selling funds, however, more likely protect information about investment positions by...

We examine whether more sophisticated accounting methods (in the form of accrual accounting) interacts with other information sources and pledging collateral to reduce asymmetries between small business borrowers lenders, thereby lowering borrowers’ probability loan denial cost debt. find that higher third party credit scores, but not use accounting, decrease likelihood denial. However, firms using exhibit statistically lower interest rates after controlling for many factors associated...

This research examines the rationality of expectations nascent entrepreneurs. Consistent with conjectures regarding entry into self-employment, I find substantial over-optimism in entrepreneurs' that they overestimate probability their activity will result an operating venture. Further, for those ventures achieve operation, individuals expected future sales and employment. To explain cross-sectional variations over-optimism, posit who adopt inside view to forecasting, through use plans...