An empirical investigation of the growth cycle theory of small firm financing

Brian T. Gregory, Matthew W. Rutherford, Sharon Oswald, Lorraine Gardiner

Research output: Contribution to journalReview articlepeer-review

151 Scopus citations


This paper empirically tests the financial growth cycle model for small and medium-sized enterprises (SMEs), which postulates that as firms become larger, older, and more informationally transparent, their financing options become more attractive. We add to the literature by providing one of the first empirical tests of the model using a large, cross-sectional data set. Our results partially support the financial growth cycle model. Specifically, our results show larger firms, as measured by total number of employees, are more likely to use public equity funding or long-term debt as opposed to insider funding.

Original languageEnglish (US)
Pages (from-to)382-392
Number of pages11
JournalJournal of Small Business Management
Issue number4
StatePublished - 2005

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation


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