1、2600 单词， 13600 英文字符， 4645 汉字 外文题目 ： Financing Preferences of Spanish Firms:Evidence on the Pecking Order Theory 出 处 ： Review of Quantitative Finance and Accounting， 2005(25): pp341-355 作 者 ： Javier Sanchez-Vidal， Juan Francisco Martin-Ugedo 原文 Abstract :This paper analyses some of the empirical impl
2、ications of the pecking order theory in the Spanish market using a panel data analysis of 1,566 firms over 19942000. 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
3、 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. Keywords: capital structure, pecking order theory 1、 Introduction A prime cont
4、ribution on information asymmetry in capital structure theory is the Myers and Majluf (1984) model. Myers and Majluf observe that the empirical evidence is not consistent with a financial policy that is determined by a trade-off of the advantages and disadvantages of market imperfections, mainly tax
5、es, costs of financial distress, and agency costs. Rather, companies financial policies seem to be better explained by the behaviour described by Donaldson (1961). He establishes a hierarchy described by company preference for internal funds over external funds； in the case of external funds, a comp
6、any prefers debt first, then hybrid instruments like convertible bonds, and finally equity issues. This hierarchy, broadly characterized as pecking order theory, indicates that companies do not make financing decisions with the aim of achieving optimal leverage. Although they tend to be taken as the
7、 same thing, the pecking order theory and the Myers and Majluf (1984) model are not strictly speaking the same. The pecking order theory is merely a description of companies financing policy, while the Myers and Majluf work represents the first model that attempts to describe this behaviour from a t
8、heoretical point of view, based on the presence of information asymmetry. Moreover, the Myers and Majluf (1984) model assumes listed companies and markets where equity is issued through firm commitments, such as the American market, not for markets where the predominant flotation method is rights of
9、ferings, such as Spain and most other countries. The aim of this paper is to provide evidence on the pecking order theory in the Spanish market. The analysis takes two directions. First, we examine the evolution of the three largest accounting sources of funding for a companyretained earnings, equit
10、y issues and debtusing a model based on Watson and Wilson (2002). Second, we study the role of long-term debt in making up financing deficits, following the flow of funds deficit equation of Shyam-Sunder and Myers (1999). The results show that small and medium-sized companies behave consistently wit
11、h predictions of the pecking order theory. When we divide the sample into subsamples on the basis of growth and the level of leverage, we see that high-growth companies base their growth on retained earnings, and firms with very high and very low debt ratios tend to converge towards more moderate de
12、bt ratios. Estimation of the flow of funds deficit equation shows that fund deficits are met by the use of long-term debt. The rest of the paper is organised as follows. Section 2 explains the pecking order theory and briefly summarizes the previous empirical evidence. The models to be tested are pr
13、esented in Section 3. Section 4 describes the sample and the methodology. Section 5 contains empirical results. Finally, conclusions are presented in Section 6. 2. The pecking order theory: Theoretical base and empirical evidence Evidence of stock market reaction to the announcement of financial off
14、erings in the American market seems to support this argument, because it shows an average 3% negative abnormal return to underwritten firm commitments of industrial firms (Kolodny and Suhler, 1985； Asquith and Mullins, 1986； Hess and Bhagat, 1986； Masulis and Korwar, 1986； Mikkelson and Partch, 1986
15、； and Muhtaseb and Philippatos, 1991, among others)； nonsignificant reactions to bond issues (Dann and Mikkelson, 1984； Eckbo, 1986； Mikkelson and Partch, 1986； and Akhigbe, Easterwood and Pettit, 1997)； with reactions to convertible bond issues somewhere in between (Dann and Mikkelson, 1984； Eckbo,
16、 1986； and Mikkelson and Partch, 1986). Yet empirical evidence in Spanish capital market issues is similar to that described by the Myers and Majluf model (1984) and also similar to the empirical evidence in the U. S. Both Rubio (1986, 1987) with monthly data and Arrondo (2002) and Martin-Ugedo (200
17、3) using daily data find negative market reactions to equity issue announcements； Gonzalez (1997) finds positive market reactions to bond issues. Finally, Holmes and Kent (1991) and Ang and Jung (1992) use mail surveys to try to discern typical company financing policies. Both authors find that comp
18、any managers follow a hierarchy of funding choices similar to the one described by the pecking order theory. Holmes and Kent (1991) find a stricter pecking order in place at SME than at larger companies. In short, many authors have tried to test the pecking order theory, but the evidence is not conc
19、lusive. 4. Sample and methodology We use the BASI database from Informa, S.A., considering firms that have data for the entire sample period 19942000. We also include firms created after January 1, 1994, if we have data for a firm from establishment through 2000. Firms must be either limited compani
20、es or private limited companies, and not in the banking or insurance economic sector. Information provided by companies sometimes shows some inconsistencies. To minimize mistakes, we use several filters. Firms are excluded if: (1) total assets were not equal to the sum of equity and total liabilitie
21、s； (2) there were not positive sales figures for all years； (3) total assets increased more than 400% or declined more than 75% one year to another； (4) firms do not have a positive equity figure； and (5) firms do not have a positive net profit for the entire period. As company financing may be infl
22、uenced by company size, we divide the sample into subsamples by size. In Euro-info 88/ES (1996), the European Commission classifies firms as small, medium, and large according to four different criteria: (1) employee number； (2) sales； (3) total assets； and (4) independence. We do not use this last
23、criterion because of lack of data. Small firms are companies with fewer than 50 employees, with sales lower than 7 million, and total assets of less than 5 million. Medium-sized firms have between 50 and 249 employees, total sales from 7to40 million, and total assets from 5to27 million. Companies ar
24、e classified as large if they have more than 250 employees, sales of more than 40 million, and total assets of more than 27 million. We adopt our own classification system based on the first three criteria defined by the Commission. That is, we include a company in a specific category size if it mat
25、ches 2 of 3 criteria for every year of the sample. If a company does not fit in any of the categories, we exclude it from analysis. Our intention is to be both strict and flexible enough to take into account that: (1) the period of analysis is seven years long, but the criteria are numerically the s
26、ame, so we work with asset and sales figures that are heterogeneous in terms of inflation； and (2) there are no employee data for some companies. The final sample is composed of 1,566 firms, 584 small, 792 medium-sized, and 190 arge. Table 1 provides information on the sample, including descriptive
27、statistics on the variables used to classify firms by size, financing source percentages and return ratios , and changes in the major financing sources with respect to increases in total assets. Panel B indicates that funding source proportions vary little with respect to company size. Percentages f
28、or equity issues and retained earnings for our whole sample come close to the Watson and Wilson (2002) percentages for the British market, but our figures for the Spanish market for debt are higher both for total and long term. The ROA and ROE variables are negatively related to size, especially the
29、 ROE. Panel C reveals that for both the whole sample and all subsamples, companies tend to finance their growth with debt and retained earnings. The sample comprises a panel data of 1,566 companies for a seven-year period. The advantage of panel data is that we can take into account the individual h
30、eterogeneity, with observations of variables for several years for each individual panel. The main point is to determine whether the model is a fixed effects or a random effects model, which in turn determines the most consistent and efficient way of estimation: intragroup estimation versus generalized least squares. In our case, the
