Small business research is becoming more sophisticated as an increasing number of scholars study more complex analytical issues. In many cases research pertaining to the small firm is part of the incomplete and inefficient markets controversy in the finance literature. Because of their size and traditional organizational form, small firms often find it extremely difficult to attract significant resources in sophisticated financial markets. These markets appear to be segmented and incomplete; whether or not the markets are efficient is subject to much debate. Adyances in Small Business Finance presents a variety of research studies that indicate the unique roles of debt and equity and the sources of funds for small firms. This book contributes important insight into major questions that face small finns' financiers, managers, and owners on a daily basis. Many of the studies in this volume deal with aspects of valuation of the small firm. In some instances, the focus is on the firm's ability to attract debt or equity and in others the emphasis is on valuation of the small firm's capital. Constand, Osteryoung, and Nast focus on the determinants of capital structure for small firms that are privately owned and are highly dependent on commercial loans as their supply of debt. Timothy Bates examines firm viability and finds that surviving firms are those that began with greater initial capital, create new jobs, and are led by entrepreneurs who are better educated.

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I The Equity Market and Small Firm.- 1 The Valuation of Initial Public Offerings: The Small Firm Case.- 2 Pricing Minority Discounts in Closely-held Corporations.- II Issues in Financing of Small Firms.- 3 Asset-Based Financing and the Determinants of Capital Structure in the Small Firm.- 4 An Empirical Analysis of Financing the Small Firm.- 5 Financial Capital Structure and Small Business Viability.- III Issues in Leveraged Buyouts, Franchising and Agency Relations.- 6 Are the Motivations for Leveraged Buyouts the Same for Large and Small Firms?.- 7 Financial Issues in Franchising.- 8 Optimum Management Contracting, Agency Problem and the Size of the Firm: A Background Analysis.- IV Financial Institutions and Small Business Financing.- 9 Risk and Return in Small Business Lending: The Case of Commercial Banks.- 10 The Impact of Financial Institution Regulatory Change on the Financing of Small Business.- V Appendix.- A. A Short Guide to the Available Research in the Field of Small Business Finance.- B. Available Financial Data Bases for Research on Small Business.- Biographical Sketches.