Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?

This paper intends to analyse the default risk in micro, small and medium enterprises (MSMEs) and its relation to new debt opportunities, debt overhang theory and growth intention. The results confirm that cash flow, capacity and leverage are the major determinants of firms’ default, while gross...

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Main Author:	Wahyudi, Imam
Format:	Article
Language:	English
Published:	Asian Academy of Management (AAM) 2014
Subjects:	HD28-70 Management. Industrial Management
Online Access:	http://eprints.usm.my/39944/ http://eprints.usm.my/39944/1/AAMJAF_10-1-5-G1_%2895-131%29.pdf

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author	Wahyudi, Imam
author_facet	Wahyudi, Imam
author_sort	Wahyudi, Imam
building	USM Institutional Repository
collection	Online Access
description	This paper intends to analyse the default risk in micro, small and medium enterprises (MSMEs) and its relation to new debt opportunities, debt overhang theory and growth intention. The results confirm that cash flow, capacity and leverage are the major determinants of firms’ default, while gross margin and efficiency measure are not significant predictors. By analysing the rating transition behaviour, we found that the further the rating migrates, the smaller the probability of transition and that the probability towards default is greater along with the decreased quality rating. By extending the analysis, we found that the debt overhang theory is not applied in relationships between banks and MSMEs.
first_indexed	2025-11-15T17:38:27Z
format	Article
id	usm-39944
institution	Universiti Sains Malaysia
institution_category	Local University
language	English
last_indexed	2025-11-15T17:38:27Z
publishDate	2014
publisher	Asian Academy of Management (AAM)
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spelling	usm-399442018-04-05T04:51:40Z http://eprints.usm.my/39944/ Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur? Wahyudi, Imam HD28-70 Management. Industrial Management This paper intends to analyse the default risk in micro, small and medium enterprises (MSMEs) and its relation to new debt opportunities, debt overhang theory and growth intention. The results confirm that cash flow, capacity and leverage are the major determinants of firms’ default, while gross margin and efficiency measure are not significant predictors. By analysing the rating transition behaviour, we found that the further the rating migrates, the smaller the probability of transition and that the probability towards default is greater along with the decreased quality rating. By extending the analysis, we found that the debt overhang theory is not applied in relationships between banks and MSMEs. Asian Academy of Management (AAM) 2014 Article PeerReviewed application/pdf en http://eprints.usm.my/39944/1/AAMJAF_10-1-5-G1_%2895-131%29.pdf Wahyudi, Imam (2014) Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur? Asian Academy of Management Journal of Accounting and Finance, 10 (1). pp. 1-37. ISSN 1823-4992 http://web.usm.my/journal/aamjaf/10-1-5-2014.html
spellingShingle	HD28-70 Management. Industrial Management Wahyudi, Imam Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title	Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title_full	Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title_fullStr	Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title_full_unstemmed	Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title_short	Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?
title_sort	default risk analysis in micro, small and medium enterprises: does debt overhang theory occur?
topic	HD28-70 Management. Industrial Management
url	http://eprints.usm.my/39944/ http://eprints.usm.my/39944/ http://eprints.usm.my/39944/1/AAMJAF_10-1-5-G1_%2895-131%29.pdf

Default Risk Analysis In Micro, Small And Medium Enterprises: Does Debt Overhang Theory Occur?

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