Testing the pecking order theory of capital structure文档.pdf

Journal of Financial Economics 00 (2002) 000-000 Testing the pecking order theory of capital structureP a, b Murray Z. Frank * Vidhan K. Goyal aFaculty of Commerce, University of British Columbia, Vancouver, BC Canada, V6T 1Z2 b Department of Finance, Hong Kong University of Science and Technology, Kowloon, Hong Kong (Received 22 March 2001; accepted 9 January 2002) Abstract We test the pecking order theory of corporate leverage on a broad cross-section of publicly traded American firms for 1971 to 1998. Contrary to the pecking order theory, net equity issues track the financing deficit more closely than do net debt issues. While large firms exhibit some aspects of pecking order behavior, the evidence is not robust to the inclusion of conventional leverage factors, nor to the analysis of evidence from the 1990s. Financing deficit is less important in explaining net debt issues over time for firms of all sizes. JEL classification: G32 Keywords: Pecking order theory, Capital structure. Financing deficit We would like to thank Mike Barclay (the referee), Ken Bechmann, Robert Chirinko, Sudipto Dasgupta, Charles Hadlock, Keith Head, Vojislav Maksimovic, Sheridan Titman, and Karen Wruck, for helpful comments. Feedback from the seminar participants at the 2000 European Finance Association th meetings, the 2000 Financial Management Association meetings, the 11 Annual Financial Economics and Accounting Conference (2000) at the University of Michigan, 2001