425
Views
0
CrossRef citations to date
0
Altmetric
Articles

Overcoming the liability of newness: The interplay of debt, equity, and profitability in nascent SMEs

ORCID Icon & ORCID Icon

References

  • Abor, J. (2005). The effect of capital structure on profitability: An empirical analysis of listed firms in Ghana. The Journal of Risk Finance, 6(5), 438–445. https://doi.org/10.1108/15265940510633505
  • Abor, J. (2008). Determinants of the capital structure of Ghanaian firms. Africa Economic (Research Paper No. 176). Research Consortium.
  • Agbozo, E., & Yeboah, E. O. (2012). Exploring the financial gap for small and medium-sized enterprises (SMEs) in Ghana: A case study of Ghana. Blekinge Institute of Technology, School of Management.
  • Ahsan, A. M. (2012). Can ROE be used to predict portfolio performance? Economics, Management and Financial Markets, 7(2), 132–148.
  • Aktas, N., Croci, E., & Petmezas, D. (2015). Is working capital management value-enhancing? Evidence from firm performance and investments. Journal of Corporate Finance, 30, 98–113. https://doi.org/10.1016/j.jcorpfin.2014.12.008
  • Amaglo, J. K. (2019). Strategies for sustainability of small and medium enterprises in Ghana [ Doctoral dissertation, Walden University].
  • Amoa‐Gyarteng, K. (2019). Financial characteristics of distressed firms: An application of the Altman algorithm model. Journal of Corporate Accounting & Finance, 30(1), 63–76. https://doi.org/10.1002/jcaf.22367
  • Amoa-Gyarteng, K., & Dhliwayo, S. (2022). The Impact of capital structure on profitability of nascent small and medium enterprises in Ghana. African Journal of Business & Economic Research, 17(2), 275–291. https://doi.org/10.31920/1750-562/2022/v17n2a12
  • Amoa-Gyarteng, K., & Dhliwayo, S. (2023). Influence of profitability and capital structure on the value of nascent SMEs: Evidence from a developing economy. EuroMed Journal of Management, 5(3–4), 210–229. https://doi.org/10.1504/EMJM.2023.133613
  • Ayepa, N. A., Boohene, R., & Mensah, M. S. B. (2019). Effects of innovativeness and firm resources on the growth of small enterprises in the Ga South Municipality in Ghana. Ghana Journal of Development Studies, 16(1), 1–21. https://doi.org/10.4314/gjds.v16i1.1
  • Baker, H. K., Kumar, S., & Rao, P. (2020). Financing preferences and practices of Indian SMEs. Global Finance Journal, 43, 1–16. https://doi.org/10.1016/j.gfj.2017.10.003
  • Boata, A., & Gerdes, K. (2019). Three indicators can reveal SME insolvency risk up to four years in advance. Economic Research. Allianz SE. Retrieved December 9, 2023, from https://www.allianz.com/en/economic_research/insights/publications/specials_fmo/SMEInsolvency_24092019.html
  • Brigham, E. F., & Houston, J. F. (2021). Fundamentals of financial management. Cengage Learning.
  • Crawford, G. C., Aguinis, H., Lichtenstein, B., Davidsson, P., & McKelvey, B. (2015). Power law distributions in entrepreneurship: Implications for theory and research. Journal of Business Venturing, 30(5), 696–713. https://doi.org/10.1016/j.jbusvent.2015.01.001
  • Cultrera, L., & Brédart, X. (2016). Bankruptcy prediction: The case of Belgian SMEs. Review of Accounting and Finance, 15(1), 101–119. https://doi.org/10.1108/RAF-06-2014-0059
  • Daskalakis, N., & Psillaki, M. (2008). Do country or firm factors explain capital structure? Evidence from SMEs in France and Greece. Applied Financial Economics, 18(2), 87–97. https://doi.org/10.1080/09603100601018864
  • Dhankar, R. S. (2019). Optimal capital structure and investment decisions. In S. Ghosh & N. Singh (Eds.), Capital markets and investment decision making (pp. 197–210). Springer. https://doi.org/10.1007/978-81-322-3748-8_12
  • Diez, F. J., Duval, R. A., Fan, J., Garrido, J. M., Kalemli-Ozcan, S., Maggi, C., Martinez Peria, M. S., & Pierri, N. (2021). Insolvency prospects among small and medium enterprises in advanced economies: Assessment and policy options (IMF Staff Discussion Note No. SDN/2021/002). International Monetary Fund. https://doi.org/10.5089/9781513574561.006
  • Field, A. P. (2009). Discovering statistics using SPSS (3rd ed.). Sage.
  • Fonseca, S., Guedes, M. J., & da Conceição Gonçalves, V. (2022). Profitability and size of newly established firms. International Entrepreneurship and Management Journal, 1–18. https://doi.org/10.1007/s11365-020-00730-6
  • Gadoiu, M. (2014). Advantages and limitations of the financial ratios used in the financial diagnosis of the enterprise. Scientific Bulletin-Economic Sciences, 13(2), 87–95.
  • Gaspar, R. E. (2017). Large firm dominance on country’s entrepreneurship potentials. Journal of Global Entrepreneurship Research, 7(1), 1–16. https://doi.org/10.1186/s40497-016-0060-0
  • Gatsi, J. G., & Osie Nsenkyire, S. (2010). Venture capital in Ghana. SSRN. https://ssrn.com/abstract=1619840
  • Gibson, C. H. (2012). Financial reporting and analysis. Cengage Learning.
  • Günzel-Jensen, F., & Holm, A. B. (2015). Freemium business models as the foundation for growing an e-business venture: A multiple case study of industry leaders. Journal of Entrepreneurship Management and Innovation, 11(1), 77–101.
  • Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
  • Jayathilaka, A. K. (2020). Operating profit and net profit: Measurements of profitability. Open Access Library Journal, 7(12), 1–11.
  • Kumar, S., Sureka, R., & Colombage, S. (2020). Capital structure of SMEs: A systematic literature review and bibliometric analysis. Management Review Quarterly, 70, 535–565.
  • Lamberg, S., & Vålming, S. (2009). Impact of liquidity management on profitability: A study of the adaptation of liquidity strategies in a financial crisis [ Master’s thesis, Umeå School of Business].
  • Nguyen, Q. T. K., & Rugman, A. M. (2015). Internal equity financing and the performance of multinational subsidiaries in emerging economies. Journal of International Business Studies, 46(4), 468–490. https://doi.org/10.1057/jibs.2014.64
  • Nukala, V. B., & Prasada Rao, S. S. (2021). Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets. Future Business Journal, 7(1), 1–14. https://doi.org/10.1186/s43093-021-00058-9
  • O’Toole, J., & Ciuchta, M. P. (2020). The liability of newer than newness: Aspiring entrepreneurs and legitimacy. International Journal of Entrepreneurial Behavior & Research, 26(3), 539–558. https://doi.org/10.1108/IJEBR-11-2018-0727
  • Pallant, J. (2013). SPSS survival manual. McGraw-Hill Education (UK).
  • Quesada-Pineda, H. J. (2019). Analysis of financial statements using ratios. Virginia cooperative extension. Virginia State University.
  • Rusu, V. D., & Roman, A. (2022, September). The relationship between financing decision of SMES and their performance. In Business development and economic governance in Southeastern Europe: 13th International Conference on the Economies of the Balkan and Eastern European Countries (EBEEC), Pafos, Cyprus, 2021 (pp. 353–367). Springer International Publishing. https://doi.org/10.1007/978-3-031-05351-1_20
  • Rutherford, M. W., Tocher, N., Pollack, J. M., & Coombes, S. M. (2016). Proposing a financial legitimacy threshold in emerging ventures: A multi-method investigation. Group & Organization Management, 41(6), 751–785. https://doi.org/10.1177/1059601116669632
  • Schoonhoven, C. B. (2015). Liability of newness. In C. L. Cooper, N. Lee, & A. Farell (Eds.), Wiley encyclopedia of management (pp. 1–5). John Wiley & Sons.
  • Situm, M. (2014). Inability of gearing-ratio as predictor for early warning systems. Business Systems Research Journal, 5(2), 23–45. https://doi.org/10.2478/bsrj-2014-0008
  • Stancu, I. (2007). Finance (4th ed.). Economica Publishing House.
  • Stinchcombe, A. L. (1965). Social structure and organizations. In J. G. March (Ed.), Handbook of organizations (pp. 142–193). Rand McNally.
  • Tabachnick, B. G., & Fidell, L. S. (2007). Using multivariate statistics. Allyn & Bacon/Pearson Education.
  • Ucal, M., & Oksay, S. (2011). The solvency ratio of external debt (SRED) as an indicator of debt crisis: The case of Turkey. Institutional Journal of Economic Research, 2(1), 166–172.
  • Wiklund, J., Baker, T., & Shepherd, D. (2010). The age-effect of financial indicators as buffers against the liability of newness. Journal of Business Venturing, 25(4), 423–437. https://doi.org/10.1108/17566260910942336
  • World Bank. (2019). Improving access to finance for SMEs. https://documents.worldbank.org/curated/en/316871533711048308/pdf/129283-WP-PUBLIC-improving-access-to-finance-for-SMEs.pdf
  • Yang, T., & Aldrich, H. E. (2017). “The liability of newness” revisited: Theoretical restatement and empirical testing in emergent organizations. Social Science Research, 63, 36–53. https://doi.org/10.1016/j.ssresearch.2016.09.006
  • Yazdanfar, D., & Öhman, P. (2015). Debt financing and firm performance: An empirical study based on Swedish data. The Journal of Risk Finance, 16(1), 1–18. https://doi.org/10.1108/JRF-06-2014-0085
  • Zuo, Y., Jiang, S., & Wei, J. (2022). Can corporate social responsibility mitigate the liability of newness? Evidence from China. Small Business Economics, 1–20. https://doi.org/10.1007/s11187-021-00551-z