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Taxpayers are expected to file a grand total of 229.3 million tax returns with the Internal Revenue Service (IRS) during Calendar Year (CY) 2006. That projected level reflects a modest [...]

UNDER THE IMPACT OF FEMINISM, THE WESTERN GENDER ORDER HAS IN RECENT decades been on the move. In the process, bastions of male power and privilege have been held to [...]

Byline: Jyrki Niskanen (1), Mervi Niskanen (2) Abstract: This study examines the use and determinants of covenants in Finnish small firms' loans. The results show that 72 of the 642 loan contracts examined include at least one covenant. Negative covenants are more common than affirmative covenants in our sample. We use loan characteristics, firm characteristics, and bank relationship variables to explain the use of covenants. Our results suggest that loans with real estate collateral are less likely to contain covenants than loans with other types of collateral. Larger firms are more likely to offer covenants, while the inverse holds for manager-owned firms. Firms with high corporate leverage, a high level of investments and a high sales growth rate offer covenants more often than other firms. Bank relationship length, changes of main bank and interbank competition also affect the use of covenants. Author Affiliation: (1) Department of Business and Management, University of Kuopio, P.O. Box 1627, 70211, Kuopio, Finland (2) Pohjois-Savo Polytechnic Business School, Finland Article History: Registration Date: 02/10/2004

This article points out that once-successful billion dollar companies are now finding it increasingly harder to return the same level of profits of the past. Companies that continue to perform well are able to quickly adapt to changes often by introducing new and/or unconventional ideas.

Byline: Leonardo Becchetti (1), Giovanni Trovato (2) Abstract: We present an empirical analysis of the determinants of growth for a sample of Italian small and medium sized firms. We show that, when investigating a sample which includes firms between 10 and 50 employees and a set of variables larger than those usually considered in the literature, growth -- net of industry characteristics and ex ante market power -- turns out to be significantly affected not only by size and age, but also by state subsidies, export capacity and credit rationing. By adopting a multivariate approach we also show that these findings are confirmed after controlling for heteroskedasticity, survivorship bias and serial correlation. Our results suggest that the hypothesis of independence of firm growth from the initial size and other factors (usually referred to as Gibrat's law in the literature) is not rejected for large firms, while it does not hold for small and medium sized firms under financial constraints in a 'bank-oriented' financial system in which access to external finance is difficult. Author Affiliation: (1) Dipartimento di Economia e Istituzioni, Universita Tor Vergata, Facolta di Economia, 00133, Roma, Italy (2) Fondazione CaRiSal, Corso Garibaldi 194, 84100, Salerno Article History: Registration Date: 13/10/2004

Calls for increased corporate 'transparency' are becoming ever more frequent and detailed. Whereas investors may have simply been looking for a stable pattern of earnings growth and/or dividend distributions in [...]

Byline: Ingrid Verheul (1), Roy Thurik (1) Abstract: Female and male entrepreneurs differ in the way they finance their businesses. This difference can be attributed to the type of business and the type of management and experience of the entrepreneur (indirect effect). Female start-ups may also experience specific barriers when trying to acquire start-up capital. These may be based upon discriminatory effects (direct effect). Whether gender has an impact on size and composition of start-up capital and in what way, is the subject of the present paper. The indirect effect is represented by the way women differ from men in terms of type of business and management and experience. The direct effect cannot be attributed to these differences and is called the gender effect. We use of a panel of 2000 Dutch starting entrepreneurs, of whom approximately 500 are female to test for these direct and indirect effects. The panel refers to the year 1994. We find that female entrepreneurs have a smaller amount of start-up capital, but that they do not differ significantly with respect to the type of capital. On average the proportion of equity and debt capital (bank loans) in the businesses of female entrepreneurs is the same as in those of their male counterparts. Author Affiliation: (1) Centre for Advanced Small Business Economics,Faculty of Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands Article History: Registration Date: 03/10/2004

Byline: Hannu Littunen (1) Abstract: This study seeks firstly to clarify which networks at start-up situation and early in life influence the survival of new firms. Secondly the study examines regional differences in the success of new firms. The subjects were firms which had closed down during their fourth to sixth year of operations, and they were compared with firms continuing in business. The results indicate, firstly, that it is networks internal to firm that create competitive advantage, innovation and efficiency. Secondly, management based on working in groups was emphasized in the firms that continued in business. In a typical family enterprise, ownership, management and family are united in a single entity. In other types of firms networks are seen as participating in the strategic management of the firm. Thirdly, close-downs were often caused by uncontrolled risks. A firm which fails after a successful start-up often tends to grow rapidly in the beginning, leaning on its product idea, but this rate of growth is too high from the viewpoint of the financing and the management of the firm. In firms which closed the growth objectives were too ambitions compared with the resources of the entrepreneur. Author Affiliation: (1) School of Business and Economics, Centre for Economic Research, University of Jyvaskyla, P.O. Box 35, FIN-40351, Jyvaskyla, Finland Article History: Registration Date: 08/10/2004

Evidence shows that a significant number of companies in Mexico are using modern forecasting techniques on a limited basis. In a mail survey of several large Mexican firms conducted in Apr and May 1997, it was found that respondents either have little knowledge or use of forecasting methods used in the US. This despite the fact that business forecasting is taught in Mexican colleges and universities. Mexican companies also tend to rely on judgmental methods when making forecasts.

Byline: Alan Hughes (1) Abstract: This paper provide an overview of recent trends in the financing of smaller businesses in the U.K. It refers in particular to the findings of a major recent programme of work in this area funded by the Economic and Social Research Council, in which the author participated. This programme included the first national survey to address these issues since the Bolton Report of 1971, as well as a range of projects covering the finance of ethnic businesses and hi-tech firms as well as the market for informal venture capital. On the basis of this work and of the results of more recent follow up surveyors it is concluded that the evidence for general equity or debt gaps in the U.K. is weak. If anything SME funding was too easy in the boom of the late 1980s. It is argued that consideration could be given to the promotion through seedcorn funding of SME co-operative or mutual guarantee schemes to reduce information asymmetry in U.K. credit markets. Author Affiliation: (1) ESRC Centre for Business Reserch, Department of Applied Economics, University of Cambridge, Sidgwick Avenue, Cambridge, CB3 9DE Article History: Registration Date: 29/09/2004

Byline: Robert Cressy (1), Christer Olofsson (2) Abstract: This paper shows that in two important sectors of Swedish industry in the early 1990s the existence of finance demand (internally generated) constraints in addition to the familiar finance supply (externally generated) constraints on businesses are a significant empirical phenomenon. Firms are aware that relinquishing some control would improve performance. However, the returns in growth, profits and survival are not sufficient to offset the utility of control loss. Owners of younger firms, especially in Business Services, regard very favourably the added expertise of new (preferably angel) equity holders, with one in three such firms having actively sought new owners. Equity finance is therefore to be regarded as a 'package' from the viewpoint of the smaller firm, with transfer of management skills from venture capitalist to firm sweetening the bitter pill of control-loss. Author Affiliation: (1) CSME, Warwick Business School, U.K (2) Swedish University of Agricultural Science, Uppsala, Sweden Article History: Registration Date: 29/09/2004

Byline: Robert Cressy (1), Christer Olofsson (1) Author Affiliation: (1) Centre for Small and Medium Enterprises, Warwick Business School, University of Warwick, Coventry, CV4 7AL, U.K Article History: Registration Date: 29/09/2004

Byline: Colin M. Mason (1), Richard T. Harrison (2) Abstract: Business angel networks (BANs) provide a channel of communication between private venture capital investors (business angels) and entrepreneurs seeking risk capital. Most operate locally on a not-for-profit basis with their costs underwritten by the public sector. However, the recent establishment of BANs by private sector organisations in the U.K. has led to a questioning of the government's continuing role in the financing of BANs. This paper demonstrates that there are significant differences between public sector and other not-for-profit BANs and private sector, commercially-oriented BANs in terms of the investments that they facilitate. Private sector BANs are primarily involved with larger, later stage deals whereas investments made through not-for-profit BANs are generally smaller, involve start-ups and other early stage businesses and are local. The emergence of private sector BANs has therefore not eliminated the need for public sector support for locally-oriented networks. Author Affiliation: (1) University of Southampton, Southampton, SO17 1BJ, U.K (2) Ulster Business School at Jordanstown, University of Ulster, UK Article History: Registration Date: 29/09/2004

Byline: Sophie Manigart (1), Carol Struyf (1) Abstract: The results of an explorative study on the financing of 18 high technology Belgian startups are reported. On a counts basis, the most important sources of financing at the startup are the entrepreneurs and the banks, but the sources that provide the largest amounts of funds are the venture capital companies and private investors. Private investors and venture capitalists have a complementary role, with the former investing mostly at the startup and the latter financing the early growth. The role of the government, universities and other companies is limited. Author Affiliation: (1) Faculty of Economic and Applied Economic Sciences and De Vlerick School of Management, University of Ghent, Belgium Article History: Registration Date: 29/09/2004

Byline: David B. Audretsch (1,2), Julie A. Elston (3,4) Abstract: This paper describes how the German Mittelstand, or small- and medium-sized enterprises, are financed in Germany. The role of the German Mittelstand, both in a static and in a dynamic framework, is described and contrasted with that of the same size group in other leading industrialised countries. We find that in general, the Mittelstand has played a mmore important role in Germany than in other industrialised nations, such as the United States or the United Kingdom. The traditional success of the German Mittelstand is partly attributable to a system of finance that is richly layered by complementary institutions designed to meet the financial needs of both large and smaller enterprises. However, we find evidence that even under the German system of finance liquidity constraints exist and are greater for smaller firms. The German system of finance moreover seems particularly deficient in the channeling of funds to new firm startups in the newer industries. Author Affiliation: (1) School of Policy Studies, Georgia State University, USA (2) Belin Institute for Economic Studies, Berlin, Germany (3) California Institute of Technology, California, United States of America (4) Berlin Institute for Economic Studies, Berlin, Germany Article History: Registration Date: 29/09/2004