What Drives Security Issuance Decisions: Market Timing, Pecking Order, or Information Asymmetry?

2010 ◽  
Author(s):  
Ming Dong ◽  
Igor Loncarski ◽  
Jenke R. ter Horst ◽  
Chris H. Veld
Keyword(s):  
Information Asymmetry ◽  
Market Timing ◽  
Pecking Order ◽  
Security Issuance

scholarly journals What Drives Security Issuance Decisions: Market Timing, Pecking Order, or Both?

2011 ◽  
Author(s):  
Ming Dong ◽  
Igor Loncarski ◽  
Jenke R. ter Horst ◽  
Chris H. Veld
Keyword(s):  
Market Timing ◽  
Pecking Order ◽  
Security Issuance

scholarly journals What Drives Security Issuance Decisions: Market Timing, Pecking Order, or Both?

2012 ◽  
Vol 41 (3) ◽  
pp. 637-663 ◽  
Author(s):  
Ming Dong ◽  
Igor Loncarski ◽  
Jenke ter Horst ◽  
Chris Veld
Keyword(s):  
Market Timing ◽  
Pecking Order ◽  
Security Issuance

The pecking order, debt capacity, and information asymmetry

2010 ◽  
Vol 95 (3) ◽  
pp. 332-355 ◽  
Author(s):  
Mark T. Leary ◽  
Michael R. Roberts
Keyword(s):  
Information Asymmetry ◽  
Pecking Order ◽  
Debt Capacity

THAI FIRMS' HISTORIES AND THEIR CAPITAL STRUCTURE

2011 ◽  
Vol 06 (01) ◽  
pp. 1150004
Author(s):  
TAK YAN LAW ◽  
TERENCE TAI-LEUNG CHONG
Keyword(s):  
Capital Structure ◽  
Stock Price ◽  
Market Timing ◽  
Pecking Order ◽  
Timing Behavior ◽  
Price Performance ◽  
Growth Opportunity ◽  
Timing Effects ◽  
The Capital Structure

This paper examines the impacts of profitability, stock price performance and growth opportunity on the capital structure of firms in Thailand. The methodology of Kayhan and Titman (2007) is applied to model the dynamics of debt ratios. The results suggest that the leverage ratios of Thai firms do adjust towards their target levels. The deviations from the target due to the pecking-order and market timing effects are found to be significant. In contrast to Kayhan and Titman (2007), our results show that the market timing behavior does not persist.

scholarly journals Pecking order and market timing theory in emerging markets: The case of Egyptian firms

2018 ◽  
Vol 44 ◽  
pp. 297-308 ◽  
Author(s):  
Alessandra Allini ◽  
Soliman Rakha ◽  
David G. McMillan ◽  
Adele Caldarelli
Keyword(s):  
Emerging Markets ◽  
Market Timing ◽  
Pecking Order

A Survey on Capital Structure Decisions of Hong Kong Firms

2000 ◽  
Vol 03 (03) ◽  
pp. 347-365 ◽  
Author(s):  
Dennis K. K. Fan ◽  
Raymond W. So
Keyword(s):  
Hong Kong ◽  
Capital Structure ◽  
Information Asymmetry ◽  
Firm Size ◽  
Pecking Order ◽  
Listed Firms ◽  
Financing Decisions

In this paper, the results of a survey on capital structure decisions of Hong Kong listed firms are reported. It is found that Hong Kong firms conformed more to the "pecking order" principle than a target long term debt-equity mix in their financing decisions. Financial managers' preferences over alternative capital raising instruments are also investigated. The degree of information asymmetry and firm size are found to have impacts on the ranking of some factors governing capital structure decisions. However, signaling motivation does not play a role in managers' financing decisions.

scholarly journals A Critical Review of Capital Structure Theories

2012 ◽  
Vol 4 (11) ◽  
pp. 553-557 ◽  
Author(s):  
Syed Muhammad Javed ◽  
Agha Jahanzeb . ◽  
Saif-ur-Rehman .
Keyword(s):  
Capital Structure ◽  
Critical Review ◽  
Market Timing ◽  
Order Theory ◽  
Agency Cost ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off

The purpose of this paper is to scrutinize and appreciate the theories of capital structure starting from theory of Miller and Modigliani (1958) of capital structure, which is also known as irrelevance theory of capital structure and also including theory like pecking order theory, trade off theory, market timing theory and agency cost theory. In addition, authors have tried to explain the theories and their contradiction with each other in detail. This paper will be an addition to understand the theories of capital structure.

scholarly journals Firm characteristics and capital structure adjustment

2018 ◽  
Vol 15 (2) ◽  
pp. 129-144 ◽  
Author(s):  
Winston Pontoh ◽  
Novi Swandari Budiarso
Keyword(s):  
Capital Structure ◽  
Cash Flow ◽  
Market Timing ◽  
Order Theory ◽  
Free Cash Flow ◽  
Internal Conflict ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Public Firms

The adjustment for the firm capital structure is unclear from perspectives of trade-off theory, pecking order theory, life cycle theory, market timing theory, and free cash flow theory, since many research findings contradict each other. Adjustments for the capital structure are complex, since the conditions for each firm are different. The objective of this study is to provide empirical evidence of how firms adjust capital structure in relationship with maturity in context of trade-off, pecking order, free cash flow, and market timing theory. In terms of hypotheses testing, this study conducts logistic regression analysis with 138 Indonesian public firms as the sample in the observed period from 2010 to 2015. To distinguish the results, this study controls the sample by size and age based on the median. The study reports that preferences for the source of funds based on the cost of capital, internal conflict, and firm maturity indicate adjustments for the firm capital structure. Based on Indonesian firms, the form of capital structure in developing countries can refer to a single model or a combination of the trade-off model and pecking order model, as well as market timing.

scholarly journals Market Timing and Pecking Order Theory in Latin America

2021 ◽  
Vol 13 (2) ◽  
pp. 79-104
Author(s):  
Francisco Javier Vásquez Tejos ◽  
Hernan Pape Larre
Keyword(s):  
Capital Structure ◽  
Latin American ◽  
Market Timing ◽  
Order Theory ◽  
Annual Data ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Share Prices ◽  
Definitive Evidence ◽  
The Capital Structure

This article aims to determine if the capital structure of Latin American companies in the emerging markets of Brazil, Chile, Mexico, and Peru, are managed according to the market timing theory or the pecking order theory. The analysis was based on a non-probabilistic sample of 170 companies, with annual data, from an unbalanced panel, in the period 2010-2018. Regressions were applied with the fixed and random effects method. The results do not show significant evidence indicating that Latin American companies comply with the pecking order theory. Furthermore, there is also no definitive evidence that companies benefit from low share prices to issue capital or from debt issuance in the face of high stock market prices. There are signs that they follow a blend of several theories, which would indicate their characteristics in the capital structure of Latin American companies.

Does financing behavior of SME entrepreneurs of Bangladesh follow capital structure theory?-an investigation into Pecking Order Theory

2020 ◽  
pp. 2050037
Author(s):  
Md. Rostam Ali ◽  
Rustom Ali Ahmed ◽  
Rushafa Tasnim Tisha ◽  
Md. Ashikul Islam
Keyword(s):  
Capital Structure ◽  
Information Asymmetry ◽  
Order Theory ◽  
Bank Loan ◽  
Structure Theory ◽  
Primary Data ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Debt Market ◽  
Capital Structure Theory

This study attempts to investigate whether the financing preferences of small and medium enterprises (SMEs)’ entrepreneurs of Bangladesh follow capital structure theory by investigating into Pecking Order Theory (POT). For this study, cross-sectional primary data have been collected through questionnaire. The answers of the questions have been measured through five points Likert Scale. The scores were analyzed using mean score. To analyze the data, some descriptive statistics have been used. Besides, one sample one tail [Formula: see text]-test has been applied to test the hypotheses. The study finds that the entrepreneurs themselves do not believe that there is an information asymmetry in debt market. But their perception regarding debt market ascertained the presence of the information asymmetry between SME sector (entrepreneurs of SME) and the debt market (banks). The answers of respondents are statistically significant that they want to use the retained profits first, bank loan as second and want to issue external equity (taking partner/s) as a third option among these three alternatives of additional financing. This tendency of the respondents towards financing is consistent with POT. Therefore, Government policy for motivating SMEs to keep formal accounting should be introduced to reduce the information asymmetry in debt market along with taking proper initiatives to increase accessibility of SMEs to institutional credit.

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