1、PDF外文：http:/ 单词， 19300 英文字符， 5970 汉字 出处： Vanacker T R, Manigart S. “Pecking Order and Debt Capacity Considerations for High-Growth Companies Seeking FinancingJ. Small Business Economics, 2010, 35(1):53-69. 原文 Pecking order and debt capacity considerations for high-growth companies seeki
2、ng financing TR Vanacker， S Manigart Abstract :This paper examines incremental financing decisions within high-growth businesses. A large longitudinal dataset, free of survivorship bias, to cover financing events of high-growth businesses for up to 8 years is analyzed. The empirical evidence s
3、hows that profitable businesses prefer to finance investments with retained earnings, even if they have unused debt capacity. External equity is particularly important for unprofitable businesses with high debt levels, limited cash flows, high risk of failure or significant investments in intangible
4、 assets. These findings are consistent with the extended pecking order theory controlling for constraints imposed by debt capacity. It suggests that new equity issues are particularly important to allow high-growth businesses to grow beyond their debt capacity. Keywords ： Financing decisions. Peckin
5、g order theory . Debt capacity. Growth 1 Introduction Although few in number, high-growth businesses contribute disproportionately to employment and wealth creation in an economy (Storey 1994). This makes organizational growth a central area of research in entrepreneurship and a major policy c
6、oncern. Proper financial management, including raising suitable financing, is one of the key factors shaping high-growth companies (Nicholls-Nixon 2005). The purpose of this paper is to offer an insight into the discrete financing decisions taken within high-growth businesses. Information asymmetrie
7、s are thought to be particularly severe in this setting (Frank and Goyal 2003), causing a substantial wedge between the costs of internal and external (debt and equity) financing (Carpenter and Petersen 2002a). We therefore focus on the pecking order theory to explain the financing choices of high-g
8、rowth companies. The pecking order theory predicts the existence of a financing hierarchy, where business managers avoid the cost of external financing if possible. As a result, they will first prefer to use internal funds, then debt and finally outside equity as a last resort to finance investments
9、 (Myers 1984； Myers and Majluf 1984). The impact of company characteristics on financial decision-making may vary according to the research setting (Harris and Raviv 1991). It is therefore important to test financial theories in settings where our knowledge is limited to determine the generali
10、zability of the theories across different settings. (Cassar 2004). Although high-growth companies are subject to the same market forces as any other company, studying the financing decisions of high-growth companies is germane for a number of reasons. First, a recent stream in the finance and growth
11、 literature discusses the importance of external equity from private equity investors, like venture capitalists and business angels in the financing of high-growth businesses (e.g., Baum and Silverman 2004； Davila et al. 2003). Conversely, it is assumed that bank debt is an unsuitable source of fina
12、ncing, especially for innovative entrepreneurial companies (e.g., Audretsch and Lehmann 2002； Carpenter and Petersen 2002b ； Gompers and Lerner 2001). Most studies in entrepreneurial finance have therefore focused on private equity financing, ignoring other potentially important sources of financing
13、 such as retained earnings and debt financing (Eckhardt et al. 2006). In contrast to most contributions on the financing of high-growth companies, we do not limit ourselves to external equity financing, but empirically consider a diverse range of financing choices, covering internally generated fund
14、s, bank financing and new equity. Second, some small business managers may never consider the use of outside debt or equity financing (Howorth 2001). Most high-growth companies, however, have considerable outside financing needs. Internal finance is often insufficient to finance high growth (Michael
15、as et al.1999； Gompers 1995). Hence, we may expect financial decision-makers in high-growth businesses to at least consider a broader range of financing alternatives compared to those inMom and Pop businesses. The paper starts with a discussion of the theoretical background and development of the hy
16、potheses. Next, we discuss the data set, where we describe in detail how high-growth companies are identified, how financing events are defined and how independent constructs are measured. Thereafter, we present our research findings, followed by conclusions and avenues for further research. Despite
17、 contradictory empirical findings, the motivation behind our choice of the pecking order as the main theoretical framework is clear-cut. Particularly, small and high-growth companies are subject to significant information asymmetries (Frank and Goyal 2003； Carpenter and Petersen 2002a), causing a su
18、bstantial wedge between the costs of internal and external financing (Carpenter and Petersen 2002a). Consequently, based on theoretical grounds one would expect the pecking order theory to be particularly useful to explain financing behavior in our sample of mostly unquoted high-growth companies. As
19、 a result, we expect these firms to prefer internally generated funds over external funds if possible. This suggests that in profitable businesses internally generated funds will gradually replace outside debt and equity financing. Hence, inside and outside funds are substitutes. This leads to our f
20、irst hypothesis: Hypothesis 1 High-growth companies that have more internal funds will be less likely to raise additional external debt or equity financing . Our first hypothesis is non-trivial in light of previous contradictory empirical evidence. Furthermore, the main competing framework to
21、the pecking order theory, the static trade-off theory, predicts a different behavior. The static trade-off theory states companies will trade off the benefits of debt, especially tax and agency benefits, against the cost of debt, especially bankruptcy and agency costs of debt (Modigliani and Miller
22、1963； Titman 1984； Myers 1977). The static trade-off theory predicts companies will make incremental financing decisions in such a way that an optimal capital structure is obtained. This optimal capital structure is obtained when the marginal benefit of an additional dollar amount of debt financing
23、equals its marginal cost. Following the static trade-off theory, we would expect companies with a lot of internal funds to rebalance their capital structure and issue additional outside debt financing. First, businesses with plenty of internal funds or financial slack are less likely to fail, reduci
24、ng the bankruptcy costs associated with debt financing. Further, additional outside debt financing may mitigate potential agency conflicts resulting from abundant internal funds (Jensen 1986). Hence, the static trade-off theory indicates that internal financing and outside debt financing are complem
25、ents rather than substitutes. Profitable businesses that built up internal equity capital in the past are predicted to be particularly likely to attract additional debt financing in the future. When internal funds are insufficient to finance the growth of the business, the question whether to raise
26、additional debt or new equity becomes critical. Bank financing is an important source of financing for young and growing businesses in Continental Europe and is expected to be widely available (Manigart and Meuleman2004). Bank debt is considered to be the cheapest source of outside financing, as ban
27、ks only require an interest on their loan and do not expect to share in the value creation, as equity investors do. Banks only have a limited return on their investment (i.e., interest margin) and as a result are expected to focus primarily on low-risk projects in businesses with sufficient cash flo
28、w to fulfill the fixed debt- related payments (Carey et al. 1998). Furthermore, banks typically require collateral and may include restrictive debt covenants in the debt contract to reduce adverse selection and moral hazard problems (Berger and Udell 1998). However, as leverage increases, the probab
29、ility of financial distress and moral hazard problems increase, and hence the marginal cost of debt financing may increase rapidly (Carpenter and Petersen 2002b ). At a certain point the cost of additional debt may be excessively high or debt financing may simply be unavailable, and business owners
30、may turn to new equity as a last resort. Contrary to additional financial debt, new equity issues do not increase the probability of failure, do not accentuate moral hazard problems and do not require collateral (Carpenter and Petersen 2002b ). However, the cost of issuing new equity is thought to b
31、e significant, especially for small and unquoted businesses. Venture capital investors, for example, require an average yearly return of more than 20% for later stage investments and as much as 55% for early stage investments (Sapienza et al. 1996). A higher expected return lowers company value and
32、in turn increases the equity stake required by the outside investor. A particularly important problem for the traditional pecking order theory, however, is exactly the wide use of outside equity financing despite its high cost (Fama and French 2005； Frank and Goyal 2005). Significant external equity issues by high-growth companies are considered to refute the pecking order theory (Frank and Goyal 2003). The extensive use of new equity by especially small and high-growth businesses may, however, be explained in a pecking order framework by taking into
