hh.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
The relationship between private investors and small firms: an agency theory approach
Halmstad University, School of Information Technology.
1992 (English)In: Entrepreneurship and Regional Development, ISSN 0898-5626, E-ISSN 1464-5114, Vol. 4, no 3, p. 199-223Article in journal (Refereed) Published
Abstract [en]

Many small firms in Sweden are characterized by a lack of equity capital. For several years measures to increase the equity capital have been discussed. In this discussion the private investors’ market has received virtually no attention. This study presents some preliminary results of the private investors in Sweden. The research in small firms financing is characterized by a lack of theoretical framework. One basic assumption in the study is that agency theory can provide an essential framework to explain the interaction between the private investor and entrepreneur. Twenty-five hypotheses generated from agency theory are formulated and tested on 62 small unlisted firms in Sweden. Multiple regression analysis is used for the causal analyses. The empirical results in the study show inter alia that the geographic distance and the private investor’s knowledge about the portfolio firm’s transformation process seem to be the most influential factors for determining the private investor’s involvement in the portfolio firms. It is also interesting to notice that none of the variables, frequency of contacts and the private investor’s operational work in the portfolio firm affect the performance of the firm. Contrary to conventional wisdom, private investors do not add value to their portfolio firms through their interaction with the entrepreneurs. The theoretical conclusion is that agency theory does not provide any satisfactory framework to explain the private investor -entrepreneur relationship. Some of the basic assumptions in agency theory seem to be invalid. A model for the relationship between private investors and entrepreneurs is developed in which four interaction strategies are identified. The model gives implications on two levels: the portfolio level and the individual case level. © 1992 Taylor & Francis Group, LLC.

Place, publisher, year, edition, pages
Abingdon: Routledge, 1992. Vol. 4, no 3, p. 199-223
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hh:diva-40755DOI: 10.1080/08985629200000012Scopus ID: 2-s2.0-0002924652OAI: oai:DiVA.org:hh-40755DiVA, id: diva2:1362235
Available from: 2019-10-18 Created: 2019-10-18 Last updated: 2019-10-18

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus
By organisation
School of Information Technology
In the same journal
Entrepreneurship and Regional Development
Business Administration

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 3 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf