scholarly journals PENGUJIAN TEORI PECKING ORDER ATAS STRUKTUR MODAL (STUDI PADA ENTITAS TERBUKA DI INDONESIA)

2018 ◽  
Vol 13 (01) ◽  
Author(s):  
Winston Pontoh
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Order Theory ◽  
Business Risk ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Public Firms ◽  
Listed Firms ◽  
Fixed Assets

Insufficient working capital for investment activities is a condition which make shareholders and other firm insiders commonly consider to determine additional source of funds. The decision of shareholders and other firm insiders in determining the source of funds for investment activities shall determine the form of firm capital structure. This study uses 236 listed firms in Indonesia Stock Exchange as the sample and take their financial information in period of 2010 to 2015 as data. In term of hypothesis testing, this study conducts path analysis at significance rate of 5%. Result of analysis shows that capital structures for public firms in Indonesia are tend to apply the model of pecking order theory. Empirically, public firms in Indonesia tend to decrease their usage for long term debt in circumstance if they are facing certain business risk. The study also shows that, profitability is not the main factor in determining firm capital structure in Indonesia.Keywords : pecking order, capital structure, business risk, profitability, fixed assets

scholarly journals Factors determining capital structure: Evidence from Companies listed on the Hanoi Stock Exchange

2021 ◽  
Vol 5 (2) ◽  
pp. first
Author(s):  
Hồ Xuân Thủy ◽  
Nguyễn Thị Huyền Trang
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Tax Shield ◽  
Factors Influencing ◽  
Fixed Assets ◽  
Debt Tax Shield

This paper investigates the factors influencing capital structure of the companies listed on the Hanoi Stock Exchange (HNX) during 2011-2018. Factors tested included non-debt tax shield, firm size, tangible fixed assets structure, and profitability based on previous studies and the two prominent capital structure theories namely the trade-off theory and the pecking-order theory. We used the variable financial leverage (LEV) to measure capital structure. The analysis employs multiple linear panel regression models in examining factors influencing capital structure, the random effect model (REM) obtained by table data processing was found to be consistent with the study data. Our results revealed that profitability and non-debt tax shield had a negative impact on capital structure. On the other hand, firm size exhibited a positive impact whilst the effect of tangible fixed assets was statistically insignificant. Amongst all tested factors, non-debt tax shield was shown to exert the greatest influence on capital structure of companies. We conclude that the factors influencing capital structure of the companies listed on the Hanoi Stock Exchange are mostly consistent with the hypothesis of trade-off theory rather than pecking-order theory. Our results support the trade-off theory because large firms are more likely to borrow to greater benefits from the tax shield. The study greatly contributes towards the enrichment of empirical evidence on the factors influencing capital structure and helps the management with planning, making properly informed decisions to improve the firm performance.

scholarly journals Does Capital Structure Drive Profitability in the Energy Sector?

Energies ◽  
2021 ◽  
Vol 14 (16) ◽  
pp. 4803
Author(s):  
Monika Wieczorek-Kosmala ◽  
Joanna Błach ◽  
Iwona Gorzeń-Mitka
Keyword(s):  
Capital Structure ◽  
Order Theory ◽  
Energy Sector ◽  
Short Term ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
The Czech Republic ◽  
Listed Firms ◽  
Large Panel

This paper investigates the factors that determine the profitability of non-listed energy firms from four central European countries: Hungary, Poland, Slovakia, and the Czech Republic. We apply the regression analysis, on a large panel of firm-year observations for the 2015–2019 timespan, to verify the hypothesis on the inversed relationship between leverage and profitability of the companies performing in the energy sector. Our results support the inversed relationship for debt in total and long-term debt, which are consistent with the assumptions of the pecking order theory. However, for short-term debt, we have found a direct relationship, which confirms the assumptions of the trade-off theory of capital structure. Our work contributes to the existing debate on the interplay between financial leverage and profitability, by providing evidence for a large panel of non-listed firms, from a single sector (energy)-oriented perspective.

The Impact of Financial Crisis on the Determinants of Capital Structure of Listed Firms in India

2017 ◽  
Vol 18 (1) ◽  
pp. 101-121
Author(s):  
Naliniprava Tripathy ◽  
Aman Asija
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Random Effect ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Listed Firms ◽  
The Impact

This study investigates the impact of 2007 financial crisis on the performance of capital structure of 88 non-financial companies listed on National Stock Exchange of India during the period between January 2003 to May 2014 by using Fixed Effect (FE) and Random Effect (RE) Models. The study has divided the data period into two distinct time intervals: (2003 -2007) as “pre-crisis” periods and (2008 – 2014) as “post-crisis” periods. The determinants of capital structure such as size, liquidity, profitability, and tangibility are used in the analysis. The findings show that tangibility and size have a greater influence on capital structure decision before crisis period. The findings also show that the coefficient of profitability is negative, displaying an inverse relationship with leverage. The study concludes that pecking order theory has more explanatory power in comparison to other theories in explaining the factors that determine the capital structure decision of listed firms of India.

scholarly journals PENGUJIAN PECKING ORDER THEORY PADA STRUKTUR MODAL PERUSAHAAN ASURANSI YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI)

2019 ◽  
Vol 17 (2) ◽  
Author(s):  
Isti Fadah
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Order Theory ◽  
Insurance Companies ◽  
Business Risk ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Financing Pattern ◽  
The Capital Structure

This study aims to analyze the effect of profitability, asset structure, and business risk on the capital structure of insurance companies listed in Indonesia Stock Exchange (BEI) in 2012-2016 and to know the pattern of financing pecking order theory applied to insurance companies listed in the Stock Exchange Indonesia (BEI) for 2012-2016. This research is explanatory research. The population in this study are all insurance companies listed on the Indonesia Stock Exchange (BEI) in 2012-2016 amounting to 12 companies and samples used in this study as many as 10 companies. The analysis method used is multiple linear regression analysis with t test. The results showed that profitability does not affect the capital structure of insurance companies, asset structure and business risk significantly influence the capital structure of insurance companies listed on the Indonesia Stock Exchange (BEI) in 2012-2016. While on pecking order theory testing, there are 3 (three) insurance companies that tend to follow the pecking order theory financing pattern and 7 (seven) companies do not follow the pecking order theory financing pattern.

scholarly journals The Pecking Order Theory: Evidence from Listed Firms in Nigeria

2015 ◽  
Vol 2 (2) ◽  
pp. 72
Author(s):  
Felix Babatunde Dada ◽  
Ben Ukaegbu
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Critical Evaluation ◽  
Fixed Effect Model ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Vector Error Correction ◽  
Listed Firms ◽  
The Capital Structure

Pecking order theory of capital structure demonstrates how managers could reduce inefficiency in the presence of information asymmetry in the source of finance. This study aims at a critical evaluation of the relevance of pecking order theory to firms, using the panel data of the listed firms on the Nigerian Stock Exchange. The study adopt the fixed effect model for the determination of the target capital structure and the decision is based on the result of the Hausman test. The study applies the Vector error correction model to establish causality between the variables. The outcome indicates that the capital structure of Nigerian firms is positively related to asset structure while it is negatively related to profitability and liquidity. The study also shows that there is a causal relationship ranging from profitability and liquidity to the capital structure.

scholarly journals The capital structure practices of listed firms in South Africa

2010 ◽  
Vol 8 (1) ◽  
pp. 624-636
Author(s):  
Jason Kasozi ◽  
Sam Ngwenya
Keyword(s):  
Capital Structure ◽  
Financial Distress ◽  
Stock Exchange ◽  
Significant Negative Correlation ◽  
Order Theory ◽  
Debt Financing ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Listed Firms ◽  
Johannesburg Stock Exchange

This study investigates whether financial theory is aligned with financial practice by testing two conventionally recognised theories of capital structure choice, the trade-off theory and the pecking-order theory against the financing practices of listed firms on the Johannesburg Stock Exchange (JSE) during the period 1995-2005. Data were obtained from the McGregor database. The results indicated a unique, but significantly positive, correlation between debt financing and financial distress, and a significant negative correlation between debt financing and the collateral value of assets. These findings suggest that financial theory is not aligned with practice on firms listed on the JSE. This study attempts to contribute to efforts to align financial theory with practice, and to help future researchers advance or modify current theories.

scholarly journals KINERJA KEUANGAN, KINERJA SAHAM DAN STRUKTUR MODAL DI INDONESIA

2018 ◽  
Vol 18 (2) ◽  
pp. 135
Author(s):  
Nera Marinda Machdar
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Order Theory ◽  
Analysis Method ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Stock Performance ◽  
Observation Period

<p><em>This study addresses the role of the company's financial performance on the company's stock performance, and investigates the role of capital structure as a moderating variable to weaken the effect of the company's financial performance on the company's stock performance. This research uses agency theory and pecking order theory. Panel regression analysis method is used for the data analysis. The data used as the sample of the company is the properti and real estat firms listed in Indonesia Stock Exchange, and the observation period is the year 2011-2016. The number of samples by using purposive samping criteria is available 234 firms-year. The findings of this study is that the company's financial performance has no effect on the company's stock performance, and capital structure can not moderate the effect of the company's financial performance on the company's stock performance.</em></p>

scholarly journals An Empirical Test of Capital Structure Theories for the Vietnamese Listed Firms

2019 ◽  
Vol 12 (3) ◽  
pp. 148 ◽  
Author(s):  
Nguyen ◽  
Ho ◽  
Vo
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Empirical Test ◽  
Empirical Studies ◽  
Order Theory ◽  
Asia Pacific ◽  
Method Of Moment ◽  
Pecking Order Theory ◽  
Factors Affecting ◽  
Listed Firms

Raising capital efficiently for the operations is considered a fundamental decision for any firms. Since the 1960s, various theories on capital structure have been developed. Various empirical studies had also been conducted to examine the appropriateness of these theories in different markets. Unfortunately, evidence is mixed. In the context of Vietnam, a rising powerful economy in the Asia Pacific region, this important issue has been largely ignored. This paper is conducted to provide additional evidence on this important issue. In addition, different factors affecting the capital structure decisions from the Vietnamese listed firms are examined. The Generalized Method of Moment approach is employed on the sample of 227 listed firms in Ho Chi Minh City stock exchange over the period from 2008 to 2017. Findings from this study suggest that the Vietnamese listed firms follow the trade-off theory to determine their capital structure (i.e., to determine the optimal debt level). In contrast, no evidence has been found to confirm that the pecking order theory can explain the financing decisions of the Vietnamese listed firms, as previously expected. In addition, findings from this study also indicate that ‘Fund flow deficit’ and ‘Change in sales’ are the most two important factors that affect the amount of debt issued for the Vietnamese listed firms. Implications for academics, practitioners, and the Vietnamese government have also been emerged from the findings of this paper.

scholarly journals DETERMINENTS OF CAPITAL STRUCTURE: EVIDENCE FROM PAKISTAN SUGAR INDUSTRY.

2016 ◽  
Vol 11 (2) ◽  
pp. 2694-2701
Author(s):  
Prof. Dr. Abdul Ghafoor Awan ◽  
Prof. Dr ZahirFaridi ◽  
Abdullahi ShahbazAnwer Ghaz
Keyword(s):  
Capital Structure ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Sugar Industry ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Factors Affecting ◽  
Financial Decision

Capital structure is one of the most complex areas of financial decision making because of its inter-relationship with other financial decision variables. Poor capital structure decisions can result in a high cost of capital which decreases the value of a firm. Effective capital structure decisions decrease the cost of capital and hence the value of a firm increases.  The objective of this empirical study is to analyze the factors affecting capital structure of sugar industry in Pakistan and to check whether the results confirm or not pecking order theory and trade-off theory. Different theories of capital structure have been reviewed like Modigliani and miller theory, trade-off theory, pecking order theory and market timing theory to make assumptions regarding capital structure of sugar firms. The findings are based on empirical results using panel data techniques for a sample of 30 firms listed on Karachi Stock Exchange from 2008-2011. The results show that tangibility is positively associated with leverage whereas size of the firm and liquidity are negatively associated with leverage. The results of profitability and growth opportunities are insignificant.

scholarly journals Pecking order, earnings management and capital structure

Accounting ◽  
2021 ◽  
Vol 7 (6) ◽  
pp. 1389-1394 ◽  
Author(s):  
Novi Swandari Budiarso ◽  
Winston Pontoh
Keyword(s):  
Capital Structure ◽  
Earnings Management ◽  
Stock Exchange ◽  
Agency Problem ◽  
Agency Problems ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Corporate Capital Structure ◽  
Debt Capacity

Most of studies imply that firms decrease or increase their debt capacity in context of pecking order theory or agency problems. On this point, the setting of this study is based on two main problems related to capital structure: the first is determining the source of funds for financing investments, and the second is solving the conflict between shareholders and managers, or the agency problem. The objective of this study is to provide evidence about how firms establish their capital structure in relation to pecking order theory and the agency problem by controlling earnings management in the context of Indonesian firms. This study conducts logistic regression on 28 firms in the consumer goods industry listed on the Indonesia Stock Exchange from 2010 to 2017.This study finds that pecking order theory determines the capital structure of most Indonesian firms with high debt. The results imply that agency problems are unable to explain corporate capital structure and earnings management is not effective for motivating Indonesian firms to establish corporate governance.

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