TABLE OF CONTENTS
LIST OF TABLES ................................................................................................................ iii
LIST OF CHARTS, FIGURES AND DIAGRAMS ........................................................... iv
ABBREVIATIONS USED IN THE STUDY ........................................................................ v
CHAPTER 1: INTRODUCTION ......................................................................................... 1
1.1 RESEARCH RELEVANCE ................................................................................................. 5
1.2 RESEARCH OBJECTIVES ................................................................................................. 6
1.3 METHODOLOGY AND RESEARCH DESIGN ...................................................................... 7
1.3.1 Hypothesis Development ........................................................................................ 8
1.4 CONTRIBUTION OF THE STUDY ..................................................................................... 12
1.5 PARADIGMS OF THE STUDY.......................................................................................... 13
1.6 ORGANISATION OF THE STUDY .................................................................................... 14
CHAPTER 2: REVIEW OF LITERATURE ..................................................................... 16
2.1 LITERATURE REVIEW ON SMES ................................................................................... 16
2.2 LITERATURE REVIEW ON FINANCING DECISION (CAPITAL STRUCTURE) ..................... 18
2.3 LITERATURE REVIEW ON FINANCIAL DECISION MAKING (BEHAVIOURAL ATTRIBUTES)
........................................................................................................................................... 24
2.4 VARIABLES RELATED TO FINANCIAL DECISION MAKING IN SMES .............................. 32
2.4.1 Financial Knowledge ............................................................................................ 32
2.4.2 Financial Attitudes ................................................................................................ 45
2.4.3 Financial Behaviour & Performance Measure ..................................................... 52
CHAPTER 3: FINANCIAL DECISION MAKING IN SMEs .......................................... 57
3.1 SMALL AND MEDIUM ENTERPRISES ............................................................................. 62
3.1.1 Concept of SME’s .................................................................................................. 62
3.1.2 Development Trend of Small and Medium Industries ............................................ 64
3.1.3 SME’s role in the Indian Economy ........................................................................ 64
3.1.4 Current Situation of SMEs .................................................................................... 65
3.1.5 Problems Faced by SMEs...................................................................................... 68
3.1.6 Growth of SMEs .................................................................................................... 69
3.1.7 Observed Changes in Recent Years ....................................................................... 69
3.2 FINANCIAL PERFORMANCE ........................................................................................... 72
3.3 FINANCIAL DECISION MAKING..................................................................................... 74
3.3.1 Managerial Behavior and Organizational Management ....................................... 78
3.4 FINANCING DECISION PRACTICES ................................................................................ 83
3.5 BARRIERS TO FINANCING IN SMES............................................................................... 86
3.6 FINANCIAL DECISION-MAKING PRACTICES AND SMES FINANCIAL PERFORMANCE.... 87
3.6.1 Financial factors affecting profitability in SMEs .................................................. 88
3.6.2 Financial decision making Challenges in SMEs ................................................... 89
3.7 CHALLENGES OF INDIAN SMES .................................................................................... 90
3.8 RELATIONSHIPS BETWEEN FINANCIAL DECISION MAKING AND SME PROFITABILITY .. 94
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CHAPTER 4: RESEARCH METHODOLOGY ............................................................... 97
4.1 RESEARCH DESIGN ....................................................................................................... 97
4.2 QUANTITATIVE APPROACH .......................................................................................... 98
4.2.1 The Panel Data Analysis Equation........................................................................ 99
4.3 QUALITATIVE STUDY ................................................................................................. 101
4.3.1 Data Collection ................................................................................................... 101
4.3.2 Analysis of Data .................................................................................................. 106
4.3.3 Data Screening and Analysis .............................................................................. 108
CHAPTER 5: CAPITAL STRUCTURE OF INDIAN SMES: STUDY ON FIRM
LEVEL DETERMINANTS .............................................................................................. 113
5.1 MODELS USED IN THE STUDY ..................................................................................... 113
5.2 RESULTS AND INTERPRETATIONS ............................................................................... 115
5.2.1 Descriptive Statistics ........................................................................................... 115
5.2.2 Correlation analysis ............................................................................................ 116
5.2.3 Panel Regression Analysis .................................................................................. 120
CHAPTER 6: FINANCING DECISION MAKING OF INDIAN SMES: STUDY ON
BEHAVIOURAL FACTORS ........................................................................................... 134
6.1 RATIONALE ................................................................................................................ 134
6.2 MODEL AND HYPOTHESIS DEVELOPMENT ................................................................. 135
6.3 METHOD ..................................................................................................................... 136
6.4 RESULTS AND INTERPRETATIONS ............................................................................... 139
CHAPTER 7: CONCLUSION AND RECOMMENDATION ....................................... 147
7.1 SUMMARY OF FINDINGS ............................................................................................. 147
7.2 CONTRIBUTION OF THE STUDY ................................................................................... 151
7.3 SUGGESTIONS FOR FUTURE RESEARCH ...................................................................... 152
APPENDICES .................................................................................................................... 154
APPENDIX 1: QUESTIONNAIRE ......................................................................................... 154
APPENDIX 2: SECONDARY ANALYSIS............................................................................... 161
APPENDIX 3: PRIMARY ANALYSIS..................................................................................... 169
BIBLIOGRAPHY .................................................................................................... 181
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