Review of Corporate Finance > Vol 2 > Issue 4

Capital Structures of Small Family Firms in Developing Countries

Tugba Bas, Istanbul Gelisim University, Turkey, , Yaz Gulnur Muradoglu, Queen Mary, University of London, UK, , Kate Phylaktis, Bayes Business School (formerly Cass), City University of London, UK,
Suggested Citation
Tugba Bas, Yaz Gulnur Muradoglu and Kate Phylaktis (2022), "Capital Structures of Small Family Firms in Developing Countries", Review of Corporate Finance: Vol. 2: No. 4, pp 745-790.

Publication Date: 07 Dec 2022
© 2022 T. Bas, Y. G. Muradoglu and K. Phylaktis
Corporate finance,  Hypothesis testing
JEL Codes: G3, G32
Leveragecapital structuredeveloping countriessmall firmsfamily firmsfamily management


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In this article:
Development of Hypotheses 
Data and Methodology 
Empirical Results 


This study uses firm level survey data to assess whether the capital structure theory is portable to small firms in developing countries and whether family ownership and management play a role in their financing decisions. Using a sample of firms from 24 developing countries from all over the world, our main results show (i) the size of the firm is an important factor in the level of leverage; (ii) small family firms do not follow the pecking order; (iii) the country of incorporation is an important determinant for the debt financing decisions of small family firms; they are sensitive to institutional characteristics, and the macroeconomic environment variables of the country; and (iv) the difference in capital structure choices is related to management styles of small family firms.



Review of Corporate Finance, Volume 2, Issue 4 Special Issue on Family Firms: Articles Overiew
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