Ordering the Preference Hierarchies for Internal Finance, Bank Loans, Bond and Share Issues
We estimate the incremental financing decision for a sample of some 150Dutch companies for the years 1984 through 1997, thereby distinguishinginternal finance and three types of external finance: bank borrowing, bondissues and share issues. First, we estimate a multinomial logit model whichconfirms several predictions of both the static trade-off theory and thepecking-order theory as to the determinants of financing choices. Next, weuse ordered probit models to determine which financing hierarchy fits thedata best. The results suggest that Dutch firms have a most-preferredfinancing hierarchy:... Mehr ...
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| Dokumenttyp: | doc-type:workingPaper |
| Erscheinungsdatum: | 2002 |
| Verlag/Hrsg.: |
Amsterdam and Rotterdam: Tinbergen Institute
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| Schlagwörter: | ddc:330 / G32 / C25 / corporate finance / discrete choice models / ordered financing hierarchies / Betriebliche Finanzwirtschaft / Kapitalstruktur / Entscheidung / Schätzung / Niederlande |
| Sprache: | Englisch |
| Permalink: | https://search.fid-benelux.de/Record/base-27638927 |
| Datenquelle: | BASE; Originalkatalog |
| Powered By: | BASE |
| Link(s) : | http://hdl.handle.net/10419/86053 |
We estimate the incremental financing decision for a sample of some 150Dutch companies for the years 1984 through 1997, thereby distinguishinginternal finance and three types of external finance: bank borrowing, bondissues and share issues. First, we estimate a multinomial logit model whichconfirms several predictions of both the static trade-off theory and thepecking-order theory as to the determinants of financing choices. Next, weuse ordered probit models to determine which financing hierarchy fits thedata best. The results suggest that Dutch firms have a most-preferredfinancing hierarchy: (i) internal finance, (ii) bank loans, (iii) shareissues, (iv) bonds issues.