Pecking Order Theory predicts that corporate managers seeking external funding would preferentially use debt before equity (Myers 1984; Myers & Majluf 1984). Contrary to this expectation, our results suggest that a significant percentage (20% of generic SME and 29% of high growth firms (HGFs) respondents) of Australian small and medium-sized enterprises (SMEs) prefer equity funding to debt and would seek equity funding, if it were readily available. In exploring the supply side of small scale private equity (SSPE), our study reveals a mismatch between supply and demand, with supply being virtually non-existent, especially for those SMEs categorized as HGFs. In order to attract investment from PE firms, SMEs need to meet stringent criteria and our study found that only 1-2% of these firms have any chance of qualifying.
|Publication status||E-pub ahead of print - Apr 2017|
|Event||8th Financial Markets and Corporate Governance Conference 2017 - Victoria University of Wellington, Wellington, New Zealand|
Duration: 20 Apr 2017 → 21 Apr 2017
Conference number: 8th
|Conference||8th Financial Markets and Corporate Governance Conference 2017|
|Period||20/04/17 → 21/04/17|
Dwyer, B., Duncan, K., & Southam, C. (2017). Small scale private equity: Demand versus supply. Paper presented at 8th Financial Markets and Corporate Governance Conference 2017, Wellington, New Zealand. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2903375