Review of Quantitative Finance and Accounting

, Volume 25, Issue 4, pp 341–355 | Cite as

Financing Preferences of Spanish Firms: Evidence on the Pecking Order Theory

  • Javier Sánchez-Vidal
  • Juan Francisco Martín-Ugedo
Article

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.

Key Words

capital structure pecking order theory 

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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  • Javier Sánchez-Vidal
    • 1
  • Juan Francisco Martín-Ugedo
    • 2
  1. 1.Dpto. de Economía Financiera y Contabilidad, Facultad de Ciencias de la EmpresaUniversidad Politécnica de CartagenaCartagena (Murcia)
  2. 2.Dpto. de Organización de Empresas y Finanzas, Facultad de Economía y EmpresaUniversidad de MurciaMurcia

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