Title: The impact of internal finance on growth empirical evidence from Swedish firm level data

Authors: Darush Yazdanfar; Sara Turner

Addresses: Mid Sweden University, Department of Social Sciences, Regementsgatan 25-27, Östersund 831 25, Sweden ' School of Business and Economics, Loughborough University, Ashby Road, Loughborough, Leicestershire LE11 3TU, UK

Abstract: This paper examines the impact of firms' internal liquidity access and related firm characteristics on the growth of Swedish micro firms across six industry sectors, based on a database of over 62,000 observations covering 10,383 Swedish micro firms over the 2007-2008 period. Using a seemingly unrelated regression model with four explanatory variables (i.e., liquidity access, size, age, and industry affiliation), this study found a significant relationship between growth and the explanatory variables. Consistent with much previous research, this paper demonstrates that liquidity access positively affects firm growth. Furthermore, other firm-level variables, such as size, age, and industry affiliation, significantly affect firm growth. This article contributes to the literature by employing a seemingly unrelated regression model to analyse a comprehensive, cross-sectoral sample.

Keywords: firm growth; small business financing; SUR model; seemingly unrelated regression model; internal liquidity access; small firms; mico enteprises; Sweden; firm size; firm age; industry affiliation.

DOI: 10.1504/IJESB.2013.054311

International Journal of Entrepreneurship and Small Business, 2013 Vol.19 No.1, pp.51 - 63

Published online: 30 Sep 2013 *

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