Testing static tradeoff against pecking order models of capital structure

Article Abstract:

The basic pecking order model of corporate financing is tested against traditional capital structure models. The basic pecking order model provides excellent first-cut description of corporate financing behavior. Moreover, simulation experiments reveal that pecking order can be easily rejected when false, whereas target-adjusted models are not rejected even in false cases. The results suggest greater confidence in the pecking order model than in static tradeoff, at least in explaining the financing behavior of mature companies.

Financial Management, Econometrics & Model Building, Models, Finance, Econometrics, Corporations, Financial analysis, Corporate finance, Business models

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External finance constraints and the intertemporal pattern of intermittent investment

Article Abstract:

Implications of external finance constraints on large investment projects as a function of time are examined. A fixed capital-stock adjustment costs model is used to study investment hazard of firm due to external finance constraints.

Forecasts, trends, outlooks, Analysis, Forecasts and trends, Investments, Market trend/market analysis, Time perspective

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R2 around the world: new theory and new tests

Article Abstract:

Impact of a firm's corporate governance and financial structure on the risk of financial crashes is analyzed in a global context.

Science & research, Research, Economic aspects, International aspects, Corporate governance, Stock market crashes

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