Alternative Finance: The determinants of alternative finance adoption for Dutch SMEs and the implications for capital structure theory

Benthem, F.J.G. van (2016) Alternative Finance: The determinants of alternative finance adoption for Dutch SMEs and the implications for capital structure theory.

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Abstract:The research goal is to provide academic insight in the perception of SMEs towards alternative financing in order to determine which factors influence the adoption decision and what the implications are for capital structure theory. This study has a qualitative research design, in which a semi structured interview has been held with six participants. The extensive theoretical adoption framework of Wisdom, Chor, Hoagwood and Horwitz (2013) has been employed as a basis to explore the adoption factors in the context of alternative financing. Trust appears to be a determining factor in selecting a financing source, and this is where the traditional banks are favoured over alternative finance organisations. The speed of acquiring the desired capital is mentioned unambiguous as the main advantage. An innovative management and business environment seem to be positive adoption predictors. Regulation and government policy is in the perception of the participants not mandatory. A negative influential factor appears to be alternative finance’s cost of capital, which is perceived as high in contrast to traditional financing. Furthermore, the research results provide evidence for the pecking order theory. From a general point of view, alternative financing is perceived as an option for constrained companies.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/69673
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