THE INFLUENCE OF CORPORATE GOVERNANCE ON THE CAPITAL STRUCTURE OF SMALL AND MEDIUM-SIZED COMPANIES THAT ARE PART OF THE LOCAL APPAREL PRODUCTIVE ARRANGEMENT IN THE HINTERLANDS OF PERNAMBUCO
The influence of corporate governance on the capital strcuture of small and medium-sized companies.
DOI:
https://doi.org/10.17524/repec.v18i2.3325Keywords:
Corporate Governance, Capital Structure, SMEs, Local Productive ArrangementAbstract
Objective: The objective of this article was to identify how governance mechanisms influence the capital structure of small and medium-sized companies that make up the Local Apparel Productive Arrangement of the Hinterlands of Pernambuco.
Methodology: The research is quantitative and used primary data to perform the analysis. The statistical methods used were the U Mann-Whitne test, Exploratory Factor Analysis and the Partial Least Squares Structural Equation Modeling technique to respond to the hypothesis that companies that adopted governance practices would have an easier time raising financial resources .
Results: The results indicated that companies that acquired debts elaborate a larger amount of reports. The findings showed evidence that the adoption of governance can reduce informational asymmetry and facilitate the granting of credit, as greater transparency can reduce the agency's problems.
Contributions: Contributes with new empirical evidence on the impact of governance on the capital structure of SMEs. In addition, the purpose is to disseminate the importance and which governance structure is most appropriate in the context of small companies, in order to improve the quality of management and facilitate access to third-party capital.
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