We owe special thanks to the Editor (Leonardo Felli), two anonymous referees and the seminar participants at York University, the 2006 Financial Management Association Annual Conference and the 2008 Kauffman Foundation Conference on Entrepreneurial Finance.
Outside Enterpreneurial Capital*
Article first published online: 23 JUN 2009
© The Author(s). Journal compilation © Royal Economic Society 2009
The Economic Journal
Volume 119, Issue 540, pages 1494–1533, October 2009
How to Cite
Cosh, A., Cumming, D. and Hughes, A. (2009), Outside Enterpreneurial Capital. The Economic Journal, 119: 1494–1533. doi: 10.1111/j.1468-0297.2009.02270.x
- Issue published online: 4 SEP 2009
- Article first published online: 23 JUN 2009
- Submitted: 16 October 2007 Accepted: 3 August 2008
This article investigates factors that affect rejection rates in applications for outside finance among different types of investors (banks, venture capital funds, leasing firms, factoring firms, trade customers and suppliers, partners and working shareholders, private individuals and other sources), taking into account the non-randomness in a firm's decision to seek outside finance. The data support the traditional pecking order theory. Further, the data indicate that firms seeking capital are typically able to secure their requisite financing from at least one of the different available sources. However, external finance is often not available in the form that a firm would like.