Capital structure theory and new technology firms: is there a match?

Susan Coleman (University of Hartford, West Hartford, Connecticut, USA)
Alicia Robb (Kauffman Foundation, Kansas City, Missouri, USA)

Management Research Review

ISSN: 2040-8269

Publication date: 20 January 2012



The purpose of this paper is to explore the extent to which various theories of capital structure “fit” in the case of new technology‐based firms.


This study uses data from the Kauffman Firm Survey, a longitudinal data set of over 4,000 firms in the USA. Descriptive statistics and multivariate results are provided.


The authors' findings reveal that new technology‐based firms demonstrate different financing patterns than firms that are not technology‐based.

Research limitations/implications

Although some support was found for both the Pecking Order and Life Cycle theories, the results also indicate that technology‐based entrepreneurs are both willing and able to raise substantial amounts of capital from external sources.

Practical implications

Technology‐based entrepreneurs need external sources of equity, in particular, in order to launch and grow their firms.


To the authors' knowledge, this is the first article to test specific theories of capital structure using a large sample of new technology‐based firms in the USA.



Coleman, S. and Robb, A. (2012), "Capital structure theory and new technology firms: is there a match?", Management Research Review, Vol. 35 No. 2, pp. 106-120.

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Copyright © 2012, Emerald Group Publishing Limited

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