The Determinants of Unlisted SMEs' Capital Structure

The paper analyzes the relationship between firm characteristics and leverage employing 11,723 unlisted SMEs' financial data.It finds that in all SMEs,state-owned SMEs and private SMEs leverage increases with the firm size and decreases with profitability,and tangibility is positively related to long-term debt ratio and negatively related to total debt ratio.Growth has an impact on capital structure in all SMEs and private SMEs,but non-debt tax shields have less effect on leverage.It indicates that firm size,profitability and tangibility are the important factors affecting SMEs' capital structure.The results generally support trade-off and pecking order arguments.