scholarly journals Penerapan Pecking Order Theory dan Kaitannya dengan Pemilihan Struktur Modal Perusahaan pada Sektor Manufaktur di Negara Indonesia dan Negara Australia

2014 ◽  
Vol 1 (3) ◽  
pp. 451-468
Author(s):  
Iryuvita Januarizka Putri Radjamin ◽  
I Made Sudana
Keyword(s):  
Capital Structure ◽  
Order Theory ◽  
External Financing ◽  
Manufacturing Companies ◽  
Analysis Model ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Significant Difference ◽  
Manufacturing Company ◽  
The Difference

This study aimed to determine first , the difference between the capital structures in Indonesian manufacturing company with in Australia , and secondly to determine whether manufacturing companies in Indonesia and Australia applying the packing order theory in determining the capital structure . The analysis model used is the comparative analysis between the two groups of independent samples to determine differences in capital structure manufacturing company in Indonesia with a capital structure of manufacturing companies in Australia. Meanwhile, to determine whether manufacturing companies in Indonesia and Australian applying packing order theory, used Shyam - Sunder and Meyers models . The study was conducted on 42 Australian manufacturing companies and 33 manufacturing companies in Indonesia, which is selected by purposive random sampling over the period 2006-20010. The results showed a significant difference between capital structure manufacturing companies in Indonesia and in Australia. Manufacturing companies in Indonesia using long-term debt is relatively higher compared to manufacturing companies in Australia. In addition, it was also found that in determining capital structure manufacturing companies in Indonesia to implement packing order theory, while manufacturing companies in Australia are not . Keywords : Capital Structure, Deficit External Financing, Pecking Order Theory

scholarly journals Descendants of Financing Decision with Reference to Capital Structure: An Empirical Analysis of Indian SMEs

2020 ◽  
Vol 47 (1) ◽  
pp. 33-42
Author(s):  
Sunaina Kanojia ◽  
Vipin Aggarwal ◽  
Ankush Bhargava
Keyword(s):  
Capital Structure ◽  
Small And Medium Enterprises ◽  
Negative Relationship ◽  
Order Theory ◽  
External Financing ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Developed Economies ◽  
Business Operations ◽  
Medium Enterprises

The article attempts to address the descendants especially in case of small and medium enterprises (SMEs) who do business with humongous constraints and largely manage the functions with own skills rather than relying on theories of finance. The study gives a deep insight on the pattern of financing of listed SMEs in India based on the financial information of 428 SMEs and further analysis of financial statements being conducted by generating financial ratios and debt components during the year 2014–2018. The study has been conducted under the reference of different capital structure theories and results have found to be significant in line with the pecking order theory, that is, SMEs utilise profit to ease their debt level and emerging organisations deploy more debt since they require more funds. The startling observation comes in terms of size where SMEs are found to be relatively small and less dependent on external financing to increase the size of the company due to the negative relationship resulting from the analysis of all forms of debt, this result is in nonconformity with the other studies done on the SMEs of developed economies. Informational asymmetry prevails in the Indian SMEs due to smaller size and more control in the hands of few managers. Growth as a parameter has shown reliance on short-term debt for overall financing of the business operations. Overall, study concludes that financing condition of the SMEs in India is still in nascent stages and new avenues of financing must be explored to solve the problems of financing in India.

scholarly journals Determinan Struktur Modal Dalam Perspektif Pecking Order Theory Dan Agency Theory

Akuntabilitas ◽  
2020 ◽  
Vol 13 (2) ◽  
pp. 191-204
Author(s):  
Nana Umdiana ◽  
Shifa Tivana
Keyword(s):  
Capital Structure ◽  
Order Theory ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Business Risk ◽  
Pecking Order ◽  
Good Industry ◽  
Pecking Order Theory ◽  
Growth Opportunity ◽  
The Capital Structure

The capital structure seen from the perspective of pecking order theory explains that companies are more likely to prefer internal funding than external companies. Pecking Order Theory explains why highly profitable companies generally have less debt. This study aims to discuss Liquidity, Asset Structure, Business Risk, Growth Opportunity, Managerial Ownership of Capital Structures on Manufacturing Companies of the basic Consumer Good Industry Sector listed on the Indonesia Stock Exchange period 2016- 2019.This type of research is an associative causal research with the type of time series. The sample was selected using the purposive sampling method. Data analyzed amounted to 40. Data was tested using multiple linear regression analysis.The result of this study indicate that Liquidity is significant affect the Capital Structure. Asset Structure, Business Risk, Growth Opportunity, Managerial Ownership did not affect the Capital Structures.

scholarly journals The Pecking Order and Financing Decisions: Evidence From Changes to Financial-Reporting Regulation

2020 ◽  
pp. 0148558X2094506
Author(s):  
Patricia Naranjo ◽  
Daniel Saavedra ◽  
Rodrigo S. Verdi
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Order Theory ◽  
External Financing ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Investment Policies ◽  
Financing Decisions ◽  
Cross Country ◽  
Debt Capacity

We use the staggered introduction of a major financial-reporting regulation worldwide to study whether firms make financing decisions consistent with the pecking order theory. Exploiting cross-country and within country-year variation, we document that treated firms increase their issuance of external financing (and ultimately increase investment) after the new regime. Furthermore, firms make different leverage decisions (debt vs equity) around the new regulation depending on their ex-ante debt capacity, which allows them to adjust their capital structure. Our findings highlight the importance of the pecking order theory in explaining financing as well as investment policies.

scholarly journals Testing trade-off theory and pecking order theory under managerial overconfidence

2019 ◽  
Vol 55 (2) ◽  
pp. 99-117
Author(s):  
Elżbieta Bukalska
Keyword(s):  
Capital Structure ◽  
Order Theory ◽  
Structure Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Financing Decisions ◽  
The Difference ◽  
Fama And French ◽  
Managerial Overconfidence

Abstract We address our research to the problem of managerial overconfidence and financing behavior. The aim of the paper is, hence, to ascertain the pattern of financing decisions of overconfident managers and identify the relevant capital structure theory (trade-off or pecking order theory) that can be used to explain financing decisions of overconfident managers. We collected a sample of 145 private companies. The degree of overconfidence was distinguished by surveying the managers on overestimation, overplacement, and overoptimism. The financial data covers the period of 2010–2015. We calculated static ratios of capital structure and uncovered the determinants of capital structure. We then unveiled the target debt ratios using Fama and French methodology and identified the difference between target and actual debt ratios. We also calculated the value of deficit and the sources of financing according to Shyam-Sunder and Myers. We found that the companies managed by overconfident managers use higher value of equity and display similar debt ratios. They also utilize reverse pecking order preference—trying to use internal funds and then turning to equity. Moreover, we noted that companies managed by overconfident managers come closer to target debt ratios and implement more risky fixed assets financing strategies. The significance of our research is that we contribute to the understanding of capital structure decisions by taking into account behavioral biases and conducting comprehensive research on both static and dynamic capital structure.

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 Determinants of the Capital Structure of Companies Listed on the Stock Exchanges of Argentina, Brazil and Chile: An Empirical Analysis of the Period from 2007 to 2016

2020 ◽  
Vol 12 (6) ◽  
pp. 18
Author(s):  
Marcelo Rabelo Henrique ◽  
Sandro Braz Silva ◽  
Antônio Saporito ◽  
Sérgio Roberto da Silva
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Order Theory ◽  
Future Research ◽  
Stock Exchanges ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Speed Of Adjustment ◽  
Asset Growth ◽  
The Capital Structure

The present investigation refers to the determinants of the capital structure, using the technique of multiple regression through Panel Data of open capital companies in the stock exchanges of Argentina, Brazil and Chile, in order to know the behavior of determinants of the capital structure in relation to Trade-Off Theory (TOT) and Pecking Order Theory (POT). The POT offers the existence of a hierarchy in the use of sources of resources, while the TOT considers the existence of a target capital structure that would be pursued by the company. Sixteen accounting variables were used, in which five are dependent (related to indebtedness) and eleven are independent variables (explaining the determinants of the capital structure). It is observed that, with the use of the Panel Data, the determinants that seem to influence in a more accentuated way the levels of debt of the companies are: current liquidity, tangibility, return to shareholders, return of assets, sales growth, asset growth, market-to-book and business risk measured by the volatility of benefits. Suggestions for future research include the use of Panel Data to analyze other factors that may influence indebtedness, mainly taxes and dividends, as well as a deeper analysis of factors that may influence the speed of adjustment towards the supposed objective level.

scholarly journals Determinants of Capital Structure in the Construction Companies across Europe and Central Asia Region

2020 ◽  
Author(s):  
Hakan Bal
Keyword(s):  
Capital Structure ◽  
Central Asia ◽  
Fixed Ratio ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Dummy Variables ◽  
Construction Companies ◽  
Negative Effect ◽  
Central Asia Region

This study examines the effects of asset tangibility, profitability, size and liquidity on capital structure (debt leverage) across the construction companies operating in in Europe and Central Asia region using the data between 1993 and 2019. The study documents that the capital structure and other financial ratios under study differ across countries, even in the same industry. Book leverage is found to be significantly negatively related to asset tangibility, profitability and liquidity in accordance with pecking order theory. In particular, fixed ratio has a negative effect on debt ratio in Russia and Romania, but no effect in other countries under study. The effect of size disappears when time dummy variables are introduced.

scholarly journals New evidences on determinants of capital structure from the Indian manufacturing industry

2016 ◽  
Vol 13 (3) ◽  
pp. 82-88 ◽  
Author(s):  
Pradeepta Sethi ◽  
Ranjit Tiwari
Keyword(s):  
Capital Structure ◽  
Manufacturing Industry ◽  
Order Theory ◽  
Manufacturing Firms ◽  
Indian Government ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Optimal Capital Structure ◽  
Financing Decisions ◽  
Size Growth

In the backdrop of Make in India push by Indian government the purpose of this study is to examine the determinants of capital structure towards a better understanding of financing decisions to be undertaken by the Indian manufacturing firms. The data for the analysis is drawn from COSPI manufacturing index of Centre for Monitoring Indian Economy (CMIE). Our sample is an unbalanced panel of 1077 firms over the period 2000-01 to 2012-13. We apply system-GMM to study different factors that affect the leverage decision of firms in India. The findings of the study reveals that the choice of optimal capital structure can be influenced by factors such as profitability, size, growth, tangibility, non-debt tax shields, uniqueness and signal. We also find the existence of both pecking order theory and static trade-off theory in the case of Indian manufacturing firms. The results thus obtained are robust across the different proxies of leverage

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