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Do Ultimate Owners Follow the Pecking Order Theory?

10 Pages Posted: 16 Mar 2016 Last revised: 11 May 2017

Rodrigo M. Zeidan

NYU Shanghai

Koresh Galil

Ben-Gurion University of the Negev - Department of Economics

Offer Moshe Shapir

New York University (NYU) - NYU Shanghai

Date Written: February 28, 2017

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.

Keywords: Pecking order; SME; capital structure

JEL Classification: G23; G32; L21

Suggested Citation

Zeidan, Rodrigo M. and Galil, Koresh and Shapir, Offer Moshe, Do Ultimate Owners Follow the Pecking Order Theory? (February 28, 2017). Quarterly Review of Economics and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2747749

Rodrigo M. Zeidan

NYU Shanghai ( email )

1555 Century Ave
Shanghai, 200122
China

HOME PAGE: http://rzeidan.com

Koresh Galil

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+972-8-6472310 (Phone)

Offer Moshe Shapir (Contact Author)

New York University (NYU) - NYU Shanghai ( email )

1555 Century Ave
Shanghai, 200122
China

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