Financing preferences of Spanish firms: Evidence on the pecking order theory

Journal ar
Review of Quantitative Finance and Accounting
  • Volumen: 25
  • Número: 4
  • Fecha: 01 December 2005
  • Páginas: 341-355
  • ISSN: 0924865X 15737179
  • Source Type: Journal
  • DOI: 10.1007/s11156-005-5459-6
  • Document Type: Article
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. © 2005 Springer Science + Business Media, Inc.

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