Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

The Determinants of Lebanese Small and Medium Enterprises Access to Debt

Author(s): Zainab Abdulwadood Jadoua, Nihal Farid Mostapha

This study aims to explore the determinants of SMEs access to debt in Lebanon. Access to debt determinants were represented by firm size, firm age, type of industry, type of ownership, tangibility and profitability. Data of 102 SMEs for the period 2014 till 2017 were collected from twelve official audit firms located in Beirut-Lebanon. Additionally, Generalized Least Squares method was used to conduct regression analysis with panel data. The findings reveal that firm age, type of industry and profitability as determinants have a positive effect on access to debt adopting trade-off theory. However, other determinants such as firm size and type of ownership have a negative effect on access to debt adopting pecking order theory. In addition, tangibility has no significant effect on access to debt. Hence, both trade off theory and pecking order theory explain Lebanese SMEs financial behavior as regards access to debt.