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Do ultimate owners follow the pecking order theory?

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  • Zeidan, Rodrigo
  • Galil, Koresh
  • Shapir, Offer Moshe

Abstract

Previous studies that have tested the pecking order theory have been inconclusive. In this paper, we use unique survey results for private Brazilian firms in order to investigate firms’ choice of capital structure. We document that ultimate owners of privately owned firms follow the pecking order theory, even in presence of subsidized loans. We also show that whether a firm is debt constrained or unconstrained does not affect this finding.

Suggested Citation

  • Zeidan, Rodrigo & Galil, Koresh & Shapir, Offer Moshe, 2018. "Do ultimate owners follow the pecking order theory?," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 45-50.
    • Handle: RePEc:eee:quaeco:v:67:y:2018:i:c:p:45-50
    DOI: 10.1016/j.qref.2017.04.008
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    References listed on IDEAS

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    More about this item

    Keywords

    Pecking order; SME; Capital structure;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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