The Modigliani-Miller Proposition After Fifty Years and Its Relation to Entrepreneurial Finance

摘要

Many studies emphasize the significance of two theoretical approaches based on information asymmetry and agency theory. Empirical evidence suggests that financial capital structures of entrepreneurial firms are determined by cost-based considerations, firm-specific characteristics, and owner-specific factors, such as desire for control and managerial independence.rnWhilst firm owner preferences are paramount in determining capital structure, the common underlying factor in accessing external finance is the alleviation of information asymmetries, which is relatively easier for firms with a high level of fixed assets accessing debt markets.