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Financing patterns in new technology-based firms: an extension of the pecking order theory
Center for Young and Family Enterprise, and Department of Economics and Technology Management, University of Bergamo, Italy.
Center for Young and Family Enterprise, and Department of Economics and Technology Management, University of Bergamo, Italy.
Jönköping University, Jönköping International Business School, JIBS, Center for Family Enterprise and Ownership. Jönköping University, Jönköping International Business School, JIBS, ESOL (Entrepreneurship, Strategy, Organization, Leadership).
2013 (English)In: International Journal of Entrepreneurship and Small Business, ISSN 1476-1297, Vol. 19, no 2, 212-233 p.Article in journal (Refereed) Published
Abstract [en]

Understanding financial strategies and patterns of new firms is crucial to the theoretical unravelling of the entrepreneurial process as well as to the elaboration of appropriate support programs from practitioner and policymaker. The aim of this paper is to investigate whether a pecking order theory underlies the financing strategies of new technology-based firms (NTBFs). From the analysis of previous literature on the subject, controversial results emerge: while some authors have confirmed a traditional pecking order theory for NTBFs, others, on grounds of NTBFs major financial constraints derived from higher information asymmetry, have proposed a revised pecking order, where access to equity (in particular private equity) occurs prior to debt. This research has been carried out applying an approach based on estimation ofinternal financial gap (Cosh et al., ECOJ 119:71494-1533, 2009) using data from the Kauffman Firm Survey. Additionally, we extend the pecking orderprediction by examining the effect of human capital as determinants for financing decisions, given its crucial role in shaping entrepreneurial dynamics of NTBFs. Our results support the existence of a revised pecking order in the case of NTBFs; moreover entrepreneur’s age and experience play a role in clarifying financial priorities of NTBFs.

Place, publisher, year, edition, pages
2013. Vol. 19, no 2, 212-233 p.
Keyword [en]
new technology-based firms, NTBF, pecking order theory, POT, entrepreneurial finance, financing patterns, human capital, entrepreneur’s age, entrepreneur’s experience
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-21459DOI: 10.1504/IJESB.2013.054964Local ID: IHHCeFEOIS, IHHESOLISOAI: oai:DiVA.org:hj-21459DiVA: diva2:628468
Available from: 2013-06-14 Created: 2013-06-14 Last updated: 2014-03-04Bibliographically approved

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