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Groups of Financial Bootstrapping Measures

In a second stage of the analysis, a factor analysis was undertaken in order to identify groups of financial bootstrapping measures. Eleven of the 32 bootstrapping measures are measured using a dichotomous scale, which implies that the assumption of normality can not be met. The use of dichotomous as well as interval scaled variables is explained by the fact that some questions simply could not be formulated using an interval scale as this would imply problems for the respondent. In line with this reasoning Hair et al., (1995) argue that in some cases dummy variables (coded 0 and 1) can be used, although variables for factor analysis generally are assumed to be of metric measurement. Furthermore, the number of variables was gradually reduced, with respect to each variableīs correlation with other variables. The final factor solution comprises 25 variables. The Kaiser-Meyer-Olkin measure is 0.69 (and Bartlettīs Test .00000), implying that a factor analysis is meaningful. Only factors with an eigenvalue over 1 was considered for further analysis, which resulted in 8 factors. Finally, on the basis of eigenvalues and implications from the scree-test, six of the eight factors were chosen. As can be seen in Table 4, the six factors represent 47 per cent of the total variance, after varimax rotation.

Factor 1 includes variables regarding direct or indirect provision of resources from the owner and relatives, while Factor 2 comprises variables dealing with the management of accounts receivable. Factor 3 consists of variables concerning the minimization of the costs of equipment and goods, by co-ordinating activities with other businesses. Furthermore, variables included in Factor 4 all deal with delayed payments from the business. Factor 5 comprises variables regarding the minimization of capital invested in stock. By using formal routines, the amount of capital invested in stock can be minimized, and by seeking best conditions possible with the supplier it can be argued that the supplier, to a greater or lesser extent, actually finances the resources invested in the stock. Finally, Factor 6 includes variables concerned with obtaining subsidies from Swedish public organizations. On the basis of the included variables the six factors were labelled:

o Factor 1 = Owner financing
o Factor 2 = Minimization of accounts receivable
o Factor 3 = Joint utilization
o Factor 4 = Delaying payments
o Factor 5 = Minimization of capital invested in stock
o Factor 6 = Subsidy finance

TABLE 4
Rotated Orthogonal Factor Analysis for Bootstrapping measures

          Factor  
Measure 1 2 3 4 5 6
             
Use of managerīs credit card 0.7 0 0.18 -0.05 0.11 -0.11
Loan from relatives/friends 0.66 0.18 0.04 0.16 -0.1 0.15
Withhold managerīs payment 0.64 -0.04 -0.12 0.28 0.05 -0.11
Assignments in other businesses 0.62 -0.13 0.1 0.01 0 -0.02
Relatives working for non–market salary 0.56 -0.13 0.22 0.03 -0.01 0.04
             
Cease business relations with late payers 0.02 0.78 0.04 -0.05 0.14 -0.08
Use routines for speeding up invoicing -0.12 0.76 -0.03 0.13 0.2 0.08
Use interest on overdue payment -0.14 0.74 0.1 0.09 0.24 0.2
Offer same conditions to all customers 0.09 0.57 -0.04 -0.02 -0.32 -0.09
             
Borrow equipment from others 0.26 0.02 0.71 0.03 -0.01 0.11
Own equipment in common with others 0 -0.12 0.67 -0.14 -0.01 0.15
Co–ordinate purchases with others -0.02 0.19 0.66 0.15 -0.07 -0.2
Practise barter instead of buying/selling 0.37 -0.04 0.52 0.21 0.05 -0.07
             
Lease equipment instead of buying -0.11 0.04 0.18 0.73 0 0.07
Delay payment to suppliers 0.29 -0.01 0.06 0.7 0.3 0.18
Delay payment of value–added tax 0.24 0.05 -0.06 0.69 -0.1 -0.04
             
Use routines in order to minimize stock -0.04 0.14 -0.11 0.03 0.72 0.05
Best conditions possible with supplier 0.11 0.26 0.05 0.02 0.71 -0.08
             
Subsidy from County Administr. Board 0.03 0.11 0.02 0.06 -0.03 0.8
Subsidy from Swedish National Board for -0.06 -0.02 -0.02 0.06 0.02 0.8
Industrial & Technical Development            
             
Offer customers discounts if paying cash 0.06 0.05 0.05 0.17 0.25 -0.08
Raise capital from a factoring company -0.08 0.11 0.02 0.04 -0.12 0.01
Choose customers who pay quickly 0.15 0.37 0.02 -0.13 0.2 0.1
             
Share premises with others 0 0.04 -0.05 0.17 0.08 -0.09
Share employees with others 0.13 -0.04 0.13 -0.05 -0.25 0.01
             
Eigenvalue: 2.5 2.44 1.86 1.81 1.56 1.54
Per cent variance explained 10 19.8 27.2 34.4 40.7 46.8

 

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