CAPITAL STRUCTURE OF ITALIAN AGRO FOOD FIRMS: AN EXPLORATORY STUDY

Many scholars analyze how firms finance themselves, how they finance their investment andTis paper wants to test the application of the different financing theories for explaining thecapital structure choice of 77 Small and Medium Enterprises (SMEs) of Italian agro foodindustry.The results show that the financing decisions in these firms could be explained by the maincapital structure theories: Pecking Order Theory (POT), Trade-off Theory and Fiscal Theory.In accord with the POT, the results confirm an approach comprising an initial check on theavailability of internal resources, followed if by the use of external capital (particularly bankdebt).This is an exploratory study. The results represent a base for further research and analysis.Regarding future lines of research on agro food Italian SMEs capital structure, this study willimprove by considering a broader time period analysis in order to elucidate whether capitalstructure in these types of companies changes during different economic cycles.