Testing the Pecking-Order Theory: Evidence from Chinese Listed Companies

2008 ◽  
Vol 41 (1) ◽  
pp. 97-113 ◽  
Author(s):  
Jinlan Ni ◽  
Miaomiao Yu
Keyword(s):  
Listed Companies ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Chinese Listed Companies

scholarly journals The Determinants of Capital Structure: New Evidence from Listed Companies in Vietnam

2019 ◽  
Vol 67 (6) ◽  
pp. 1587-1595
Author(s):  
Phuong Dung Thi Nguyen ◽  
Thanh Nhan Thi Do ◽  
Michael Joseph Dempsey
Keyword(s):  
Capital Structure ◽  
High Growth ◽  
Listed Companies ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Financial Firms ◽  
High Profit ◽  
Tangible Assets ◽  
New Evidence

This study examines the factors which affect the capital structure of 608 non-financial firms in Vietnam during the period 2009–2017. Our findings indicate that companies with more tangible assets prefer longer term to shorter term debts while larger companies tend to borrow more to finance their activities. Furthermore, companies with high profit and high growth in Vietnam are able to opt for alternative options for raising capital in addition to borrowing. Overall, we recommend that capital structures in Vietnamese firms can be understood within a framework of the pecking order theory. Interestingly, audit reputation is the single considered determinant that does not appear to impact on the firms’ capital structure.

scholarly journals The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

2016 ◽  
Vol 8 (2) ◽  
pp. 94 ◽  
Author(s):  
Tharmalingam Pratheepan ◽  
Y. K. Weerakon Banda
Keyword(s):  
Sri Lanka ◽  
Capital Structure ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Listed Companies ◽  
Order Theory ◽  
Positive Sign ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
The Capital Structure

This research examines the determinants of capital structure of selected listed companies in Sri Lanka. The capital structure of 55 companies listed in Colombo Stock Exchange (CSE) is empirically examined using the fixed effects model. Based on the findings of the panel data analysis during the period of 2003-2012, Profitability exhibits statistically significant of inverse relationship with leverage while firm size and growth shows statistically significant of positive relationship with leverage for selected listed companies in Sri Lanka. Non–debt tax shields and tangibility indicate insignificant impacts on leverage. The results of this empirical study shows that there is robust evidence to support the pecking order theory by manufacturing based companies on the capital structure determinant of profitability variable, and growth variable also strongly supports to the association of the pecking order theory. Though, trade–off theory also can not be rejected because of the correct estimate of the positive sign of size variable of manufacturing based companies. Thus, implication of pecking order theory is more appropriate in Sri Lankan perspective.

scholarly journals Pecking Order Theory and Trade-Off Theory of Capital Structure: Evidence from Indonesian Stock Exchange

The Winners ◽  
2012 ◽  
Vol 13 (1) ◽  
pp. 40
Author(s):  
Priska Ralna Eunike Culata ◽  
Tri Gunarsih
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Empirical Studies ◽  
Listed Companies ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Optimal Capital Structure ◽  
Optimal Capital

Numerous empirical studies in the finance field have tested many theories for firms’ capital structure. The pecking order theory and the trade-off theory of capital structure is among the most influential theories of firms’ capital structure. The trade-off theory predicts optimal capital structure, while the pecking order theory does not predict an optimal capital structure. According to pecking order theory,  the order of financial sources used is the source of internal funds from profits, short-term securities, debt, preferred stock and common stock last. The main objective of this study is to econometrically test whether the listed companies in Indonesian Stock Exchange follow the pecking order theory or the trade-off theory. Samples in this study are public companies listed during 2009-2010. The research questions are tested by running regression models.  The empirical result of this study shows that the pecking order theory is not supported, while the trade-off theory is supported. This suggests that the capital structure of listed companies in Indonesian Stock Exchange is financed based on optimal capital structure, not by the order financial resources.

Qualitative Research on Critical Issues In Halal Logistics

2013 ◽  
Vol 1 (2) ◽  
pp. 131 ◽  
Author(s):  
Mohamed Syazwan Ab Talib ◽  
Lim Rubin ◽  
Vincent Khor Zhengyi
Keyword(s):  
Capital Structure ◽  
Agency Theory ◽  
Random Effect ◽  
Random Effect Model ◽  
Order Theory ◽  
Specific Factor ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Corporate Financing ◽  
Financing Decision

This is a preliminary study developed to explore the determinants of capital structure of Shariah-compliant firms listed in Bursa Malaysia. This study is primarily motivated by the issue of the determinants still being inconclusive in the area of capital structure. The study is performed using the static models namely Pool Ordinary Least Square, Fixed Effect and Random Effect Model. Empirical analysis on the determinants reveals that country specific factor which is GDP and sector specific factor which is industry concentration are also significant in influencing the corporate financing decisions in this country along with firm specific factors such as efficiency, bankruptcy risk, profitability, tangibility, liquidity and size of the firm. The findings revealed that results are sensitive to models employed in the study. Nevertheless, the applicability of capital structure theories such as the trade-off theory, agency theory and pecking order theory diverge across sectors in Malaysia. The pecking order theory and agency theory are found to be the dominant theories governing the corporate financing decision in the country as well. It indicates strong evidence of hierarchy practised in firms’ financing decision. The finding on agency theory being dominant justifies the function of short-term debt as a controlling mechanism to mitigate the agency problem arises within firms across sectors. 

scholarly journals Testing the pecking order theory of capital structure: the case of Islamic financing modes

2020 ◽  
Vol 6 (1) ◽  
Author(s):  
Moncef Guizani
Keyword(s):  
Capital Structure ◽  
Random Effect ◽  
Order Theory ◽  
Equity Financing ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Corporate Financing ◽  
Financing Decisions ◽  
Executive Managers ◽  
The Capital Structure

AbstractThe purpose of this paper is to examine whether or not the basic premises according to the pecking order theory provide an explanation for the capital structure mix of firms operating under Islamic principles. Pooled OLS and random effect regressions were performed to test the pecking order theory applying data from a sample of 66 Islamic firms listed on Kingdom of Saudi Arabia stock market over the period 2006–2016. The results show that sale-based instruments (Murabahah, Ijara) track the financial deficit quite closely followed by equity financing and as the last alternative to finance deficit, Islamic firms issue Sukuk. In the crisis period, these firms seem more reliant on equity, then on sale-based instrument and on Sukuk as last option. The study findings also indicate that the cumulative financing deficit does not wipe out the effects of conventional variables, although it is empirically significant. This provides no support for the pecking order theory attempted by Saudi Islamic firms. This research highlights the capital structure choice of firms operating under Islamic principles. It explores the implication of the relevant Islamic principles on corporate financing preferences. It can serve firm executive managers in their financing decisions to add value to the companies.

scholarly journals Testando a teoria de hierarquização de fontes de financiamento nas empresas brasileiras

2005 ◽  
Vol 16 (37) ◽  
pp. 37-45 ◽  
Author(s):  
Otávio Ribeiro de Medeiros ◽  
Cecílio Elias Daher
Keyword(s):  
Cross Section ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory

O presente trabalho testa se a teoria conhecida como Pecking Order Theory ou Teoria de Hierarquização de Fontes de Financiamento (THFF) fornece explicação empírica para a estrutura de capital das empresas no Brasil. De acordo com essa teoria, a estrutura de capital seria resultante de um funding hierarquizado, em que os recursos gerados internamente teriam prioridade, seguidos pela emissão de dívida e, apenas em último caso, pela emissão de ações. Em sua forma forte, a THFF sustenta que emissões de ações nunca ocorreriam, enquanto, em sua forma fraca, volumes limitados de emissões são aceitáveis. A metodologia do estudo empírico envolve regressões em cross-section e testes de hipóteses para especificações oriundas da teoria em questão para as formas forte e fraca. Os resultados levam a concluir que a teoria testada, em sua forma fraca, é aplicável às empresas brasileiras, o mesmo não ocorrendo com a sua forma forte. Mostram, também, que a qualidade de ajustamento das regressões para o Brasil é significativamente melhor do que aquelas relatadas para empresas norte-americanas e que as empresas brasileiras parecem estar mais próximas da forma forte da THFF do que as norte-americanas. A amostra consiste de 132 empresas de capital aberto e os dados contábeis referem-se a 2001.

scholarly journals Análise dos determinantes do endividamento das empresas de capital aberto do agronegócio brasileiro

2009 ◽  
Vol 47 (1) ◽  
pp. 89-122 ◽  
Author(s):  
Valéria Gama Fully Bressan ◽  
João Eustáquio de Lima ◽  
Aureliano Angel Bressan ◽  
Marcelo José Braga
Keyword(s):  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory

Estudos sobre a estrutura de capital e a identificação de seus determinantes são temas relevantes nas pesquisas envolvendo a gestão financeira das empresas. Neste aspecto, o presente estudo teve como objetivo avaliar os determinantes da alavancagem das empresas do agronegócio brasileiro conforme o modelo de Rajan e Zingales (1995). Na definição da amostra, foram selecionadas 26 empresas que estavam enquadradas em alguma das três subdivisões do agronegócio brasileiro: a) o setor de produção agropecuária; b) setor fornecedor de insumos e fatores de produção e c) setor de processamento e distribuição, com base em classificação da CNA (Confederação da Agricultura e Pecuária do Brasil). O estudo foi feito com base no banco de dados da Economática®, tendo sido utilizado o modelo de regressão com dados em painel. Os resultados indicaram que as variáveis tangibilidade dos ativos, oportunidadede crescimento, tamanho e lucratividade foram estatisticamente significantes e podem ser interpretadas como fatores determinantes do endividamento das empresas do agronegócio brasileiro. Conclui-se, ainda, que o modelo estimado por meio da regressão com dados em painel gerou resultado compatível com aqueles preconizados pela pecking order theory.

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