• Media type: E-Book
  • Title: Private Equity for SME : A Behavioural Model of the Demand-Side Perspective
  • Contributor: Brettel, Malte [Author]; Breuer, Wolfgang [Other]; Espel, Philipp [Other]; Abedin, Annas [Other]
  • Published: [S.l.]: SSRN, [2009]
  • Extent: 1 Online-Ressource (50 p)
  • Language: Not determined
  • DOI: 10.2139/ssrn.1141068
  • Identifier:
  • Origination:
  • Footnote: Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 17, 2009 erstellt
  • Description: Assuming a demand-side point of view, i.e., the view of owner-managers of small and medium enterprises (SME), we identify the drivers and inhibitors of the utilisation of private equity. Subsequently, we test these using survey data. Intention to finance with private equity explains the variations in actual private equity utilisation (R² = 31 %). Attitude, social norm and perceived behaviour control determine intention (R² = 57 %). Attitude towards financing with PE is mainly driven by perceived value addition, followed by the negative influence of perceived loss of control and perceived risks for the business. Social norm is mainly explained by the normative influence of external consultants (especially bankers and auditors). However, the strength of these influencing factors varies for different groups of SME. Our results lead to several suggestions with respect to how PE offers for SME should be designed to bring about maximum intention, and, consequently, also a higher probability of success. SME PE should be packaged with hands-on involvement, rely on monitoring by means of milestones and supervisory council control, and should avoid interfering with operations and the ownermanagers' relationship with core personnel. It is best distributed through the involvement of intermediaries, especially banks. In family businesses, the family should be involved in the PE process. With regard to theory implications, we reconfirm and deepen the applicability of the Theory of Planned Behaviour (TPB) to SME financing questions. We draw special attention to attitude and social norms as variables of relevance in the complex interplay of factors affecting the SME financing behaviour. Moreover, based on our multivariate approach, we suggest that factors like the influence of external consultants, family and value adding activities are of equal importance to a small or medium enterprise's financial decision making as obtaining capital, avoiding loss of control and risk considerations. This all brings us to the conclusion that, in order to integrate the full scope of relevant variables, a descriptive-inductive approach to SME capital structure choice may be justified, at least as much as a prescriptive-deductive one
  • Access State: Open Access