Capital structure decision of new technology-based firms: evidence from youth entrepreneurship

The paper investigates the existence of a pecking order in new technology-based firms (NTBFs) financing, and provides an evidence on factors determining what source of capital NTBFs try to access. The authors pay particular attention to aspects of human capital such as age, education and experience and focus on potential singularities exhibited by young novice entrepreneurs and potential constraints that they experience. These entrepreneurs are found not to be financially constrained. The findings also contribute to the academic debate on the existence of a reversed pecking order for NTBFs. Results confirm traditional pecking order patterns and show that NTBFs do rely heavily on external debt, contradicting the most common theoretical predictions. However data also suggest that (as a new perspective) some light can be shed on the hierarchy between debt and equity as financial source preferred by NTBF when it is investigated from a longitudinal rather than a cross-sectional perspective