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Trade-off Theory vs Pecking Order Theory Revisited

Singh, Priyanka; Kumar, Brajesh - In: Journal of Emerging Market Finance 11 (2012) 2, pp. 145-159

This article empirically tests the two competing theories of capital structure: Trade-off theory against Pecking Order theory using the time series hypothesis. This study is performed for an emerging market context taking the case of Indian firms with a sample from 10 industries for the period...

Persistent link: https://www.econbiz.de/10010772808

A New Test of Capital Structure

Mayer, Colin; Sussman, Oren - Department of Economics, Oxford University - 2003

leverage, consistent with a trade-off theory. We conclude that a combination of the pecking order and trade-off theories …

Persistent link: https://www.econbiz.de/10010661434

Firm Size and Capital Structure Decisions: Evidence From Turkish Lodging Companies

Karadeniz, Erdinc; Kandir, Serkan Yilmaz; Iskenderoglu, Omer - In: International Journal of Economics and Financial Issues 1 (2011) 1, pp. 1-11

Aim of this study is to investigate the role of firm size on capital structure decisions of Turkish lodging companies. In this context, a survey questionnaire is developed and sent to unquoted Turkish lodging companies. 163 lodging companies answered the survey and they are classified according...

Persistent link: https://www.econbiz.de/10009144166

French firm's financing choices: towards a reconciliation of the static trade-off theory and the pecking order theory?

Mazen, Gharsalli - HAL - 2012

The main purpose of this study is to examine the validity of the static trade-off theory and the pecking order theory using a French panel data. Our empirical tests provide that we can not formally reject either of the two theories explaining financing behavior. However, they confirm the...

Persistent link: https://www.econbiz.de/10009148037

Capital structure determinants and the new High-Tech firms: The critical distinction between fixed and random effects through a static panel data investigation

Bouallegui, Imen - Volkswirtschaftliche Fakultät, … - 2006

The aim of our research is to study the association between observed leverage and a set of explanatory variables, using … profitable firms use less leverage. We also find that large companies tend to use more debt than smaller companies, and that … firms which have high operating risk can lower the volatility of the net profit by reducing the level of debt. Leverage is …

Persistent link: https://www.econbiz.de/10009019717

Determinants of capital structure: evidence from a major developing economy

Köksal, Bülent; Orman, Cüneyt - In: Small Business Economics 44 (2015) 2, pp. 255-282

A major shortcoming of capital structure studies on developing economies is that they generally restrict their analyses to large publicly-traded manufacturing firms. Consequently, we know little about the applicability of various capital structure theories to firms that are private, small,...

Persistent link: https://www.econbiz.de/10011154835

Changes in Capital Structure of Czech SMEs: A Dynamic Panel Data Approach

Jindrichovska, Irena; Ugurlu, Erginbay; Kubickova, Dana - In: Ekonomika a managment 2013 (2013) 3, pp. 6-26

In this paper, we explore two of the most relevant theories that explain financial policy in small and medium enterprises (SMEs): pecking order theory and trade-off theory. The theoretical section provides an overview of contemporary theories of capital structure. According to the pecking order...

Persistent link: https://www.econbiz.de/10011195007

The Impact of Firm and Industry Characteristics on Small Firms' Capital Structure : Evidence from Dutch Panel Data

Degryse, Hans; de Goeij, Peter; Kappert, P. - Tilburg University, Center for Economic Research - 2009

We investigate small firms’ capital structure, employing a proprietary database containing financial statements of Dutch small and medium-sized enterprises (SMEs) from 2003 to 2005. We find that the capital structure decision of Dutch SMEs is consistent with the pecking order theory: SMEs use...

Persistent link: https://www.econbiz.de/10011090758

Dynamic Approach of Capital Structure of European Shipping Companies

Arvanitis, Stavros H.; Tzigkounaki, Irakleia S.; … - In: International Journal of Business and Economic Sciences … 5 (2012) 3, pp. 33-63

than borrowing) against leverage. Moreover, we observe a negative relationship between size or profitability and debt. Our …

Persistent link: https://www.econbiz.de/10011200122

How SME Uniqueness Affects Capital Structure: Evidence From A 1994–1998 Spanish Data Panel

Sogorb-Mira, Francisco - In: Small Business Economics 25 (2005) 5, pp. 447-457

–1998, modelling the leverage ratio as a function of firm specific attributes hypothesized by capital structure theory. Our results … suggest that non-debt tax shields and profitability are both negatively related to SME leverage, while size, growth options …

Persistent link: https://www.econbiz.de/10005722631