This paper models the borrowing decision of a small firm seeking a bank loan when it can optionally hire, at a cost, an independent external auditor to convey its risk characteristics to lenders. The analysis shows that a necessary condition for a potential borrower to prefer having an audit to...

The motivation for this contingency-type study is based on the notion that prior studies on management accounting systems (MAS) has almost entirely focused on large business organizations and neglected consideration of the effects of contextual variables and MAS on organizational effectiveness...

The beneficial economic effects of entrepreneurial activity can only be realised if such activity is relatively unconstrained in both product and factor markets, finance has been widely identified as a potential constraint on entrepreneurial activity due to either debt or equity gaps. However,...

There is an increased interest in small companies and entrepreneurship among academicians and policy makers. The melting of the cold war and the collapse of the socialist economies of the Soviet bloc, in combination with the interest of the affected countries in imitating some form of...

This paper examines the role of interest rates and securities within the context of the small firm - bank lending relationship and questions whether banks alter their lending conditions on the basis of specific firm characteristics and the nature of the borrowing undertaken. The results suggest...

The use of traditional risk measurement techniques for small unlisted businesses proves difficult due to a lack of market information. A sample of 209 small businesses in New Zealand was gathered to test the possibility of using accounting betas for risk measurement. While the accounting betas...

This paper is a first attempt at differentiating the problems of finance of the privately held small businesses from their larger counterparts. Small businesses, though not concerned with the problems and opportunities associated with publicly traded firms, have different types of complexities,...

This paper reports survey results regarding leasing practices of small firms. Small firms that lease are more likely to be relatively large manufacturing firms which exhibit higher debt ratios and higher sales growth. The survey responses as well as empirical analyses of pertinent data reveal...

Although it has been suggested that participation financing may allow publicly traded firms to reduce the agency cost of perk consumption, the effect of this type of financing in small firms needs more discussion. The objective of the article is to analyze the small firm effects on the...

Finance companies have been perceived as isolated and insignificant lenders, attracting high risk borrowers and charging these borrowers relatively high prices. Using the 1988 National Survey of Small Business Finance, this study examines the relationship between finance companies and other...