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Capital structure in innovative high growth firms
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Business Administration and Industrial Engineering.ORCID iD: 0000-0002-3377-6177
2008 (English)In: Proceedings: 2nd Conference on Nordic Innovation Research, December 3-4 2007; Luleå University of Technology / [ed] Håkan Ylinenpää, Luleå: Luleå tekniska universitet, 2008, p. 193-Conference paper, Meeting abstract (Other academic)
Abstract [en]

The purpose with the present paper is to improve the understanding of management's choice of capital structure in high-growth innovative new technology-based firms (NTBFs). A conceptual model regarding the relationship between 1. resource based strategy and capital structure and 2. stakeholder strategy and capital structure is developed. Resource based strategy is considered in terms of resource based view (RBV) and stakeholder strategy in terms of agency theory. Choice of capital is further connected to management preferences in terms of the pecking order theory. The paper contributes to the area of small firm finance from the perspectives of financial accounting and management strategies. Based on the paper, we suggest that a resource based strategy call for development of unique resources of opaque character. Internal financing in line with the pecking-order theory is thus preferred for competitive innovations based on opaque resources of unique character. However, opaque resources are connected to high uncertainty and information asymmetry in terms of the agency theory. This results in agency costs for the management. Based on the agency theory our suggestion is that NTBFs prefer internal generated financing in first case. A controversy in the two theoretical areas leads us to a paradox. A resource based strategy lead towards competitive innovations at the same time as it restricts the firms' access to external resources and thus the ability to develop competitive innovations. The paradox also helps to explain the financial gap for innovative NTBF.

Place, publisher, year, edition, pages
Luleå: Luleå tekniska universitet, 2008. p. 193-
National Category
Business Administration
Research subject
Accounting and Control
Identifiers
URN: urn:nbn:se:ltu:diva-30975Local ID: 50080670-aa49-11dc-9057-000ea68e967bOAI: oai:DiVA.org:ltu-30975DiVA, id: diva2:1004204
Conference
Conference on Nordic Innovation Research : 03/12/2007 - 04/12/2007
Note
Godkänd; 2008; 20071214 (jeaneth)Available from: 2016-09-30 Created: 2016-09-30 Last updated: 2017-11-25Bibliographically approved

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Johansson, JeanethLundberg, HansMalmström, Malin

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CiteExportLink to record
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Citation style
  • apa
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Output format
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