Growth and capital structure—Evidence from panel data of listed firms on SMEs board

Using the panel data of listed firms on SMEs board in the period of 2005-2009, this paper investigates the relation between growth and capital structure of SMEs in China. With the capital structure measured simultaneously by the total debt-to-asset ratio(TD/A) and long term debt-to-asset ratio(LD/A), and growth measured by the market-to-book asset ratio(M/BA), our results show that there are both negative relations between capital structure and growth of SMEs using TD/A and LD/A to measure capital structure respectively.