Financing Preferences of Spanish Firms: Evidence on the Pecking Order Theory

This paper analyses some of the empirical implications of the pecking order theory in the Spanish market using a panel data analysis of 1,566 firms over 1994-2000. The results show that the pecking order theory holds for most subsamples analyzed, particularly for the small and medium-sized enterpris...

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Bibliographic Details
Published inReview of quantitative finance and accounting Vol. 25; no. 4; pp. 341 - 355
Main Authors Sánchez-Vidal, Javier, Martín-Ugedo, Juan Francisco
Format Journal Article
LanguageEnglish
Published New York Springer Nature B.V 01.12.2005
Subjects
Accounting
Asymmetry
Bond issues
Business management
Business strategies
Capital
Capital markets
Capital structure
Companies
Corporate finance
Data analysis
Debt
Debt financing
Economic models
Economic theory
Empirical research
Equity
Finance
Hierarchy
Investments
Long term debt
Market structure
Net present value
Panel data
Retained earnings
Small & medium sized enterprises-SME
Spain
Stockholders
Studies
Theory
Spain
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Summary:This paper analyses some of the empirical implications of the pecking order theory in the Spanish market using a panel data analysis of 1,566 firms over 1994-2000. The results show that the pecking order theory holds for most subsamples analyzed, particularly for the small and medium-sized enterprises and for the high-growth and highly leveraged companies. It is also shown that both the more and the less leveraged firms tend to converge towards more balanced capital structures. Finally, we observe that firms finance their funds flow deficits with long term debt. [PUBLICATION ABSTRACT]
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0924-865X
1573-7179
DOI:10.1007/s11156-005-5459-6