This paper studied improvement directions of Korean small firms' financial structure in terms of small firms' particular situations and governmental supporting systems. Recent trends for the Korean small firms' financial ratio support that stabilizati...
This paper studied improvement directions of Korean small firms' financial structure in terms of small firms' particular situations and governmental supporting systems. Recent trends for the Korean small firms' financial ratio support that stabilization of management is dependent upon the robustness of financial structure. Although no completely satisfactory theory has yet been found to explain the existence of optimal financial structure, this paper suggests that Korean small firms should behave as though it does exist. This study shows how firm in practice can determine a financial structure suitable for its particular situation. Research implications and suggestions were discussed. The overall implication is that robust financial structure is an important factor for gaining and sustaining of competitive advantage. Managers of small firms and policy makers should realize the importance of target financial structure and appropriately implement it as a strategic tool for strengthening firms' competitiveness.