优序融资理论外文文献翻译

文献信息：

文献标题：Financing Preferences of Spanish Firms: Evidence on the Pecking Order Theory（西班牙企业的融资偏好：优序融资理论的实证研究）国外作者：Javier Sánchez-Vidal，Juan Francisco Martín-Ugedo

文献出处：《Review of Quantitative Finance & Accounting》, 2005, 25(4):341-355

字数统计：英文2111单词，11535字符；中文3840汉字

外文文献：

Financing Preferences of Spanish Firms: Evidence on the

Pecking Order Theory

Abstract 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.

Keywords:capital structure, pecking order theory

Introduction

A prime contribution 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 taxes, 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 company 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 same thing, the pecking order theory and the Myers and Majluf (1984) model are not strictly speaking the same. The pecking order theory i s 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 theoretical 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 offerings, 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 company—retained earnings, equity issues and debt—using 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).

There are several features which distinguish the Spanish financial system from the American one. Probably the main difference affecting the pecking order is the flotation method in equity issues. Equity securities are issued in a wide variety of ways, mainly firm commitments underwritten offers and rights issues. The relative importance of these methods depends on the issuing firm’s country. In the United States rights offerings have declined in frequency, having virtually disappeared by 1980.In Spain, rights prevail. This difference may play an important role in the hierarchy described by the pecking order theory. In addition: (a)debt financing is