The capital financing theory is a topic of continual interest in financial economics. Interest in financing behaviors of companies, which was triggered through the optimal capital structure by Modigliani and Miller (1958), was de ned by Myers (1984) and Shyam-sunder and Myers (1999), and advanced to the presentation of the pecking order theory, which stated that there is an order in a company's financing behavior. The model that was used by Shyam-sunder and Myers to verify the pecking order theory assumed that the relationship between debt issued and cash deficit would have linearity. However, SSM linear models regarding this pecking order theory have been opposing this pattern based on the expanded nonlinear model and explanatory power proposed by Lemmon and Zender (2010). In the econometrics field, Cho, Ishida and White (2010) introduced QLR testing and presented a verification methodology that verifies whether a linear or nonlinear model is appropriate for analysis based on data. In this paper, this type of QLR test will be used to specify whether the linear model of Shyam-sunder and Myers or the nonlinear model of Lemmon and Zender is the right model to verify the pecking order theory based on empirical data from 85 Korean manufacturers.
Keywords: Pecking order theory; Quasi Likelihood Ratio test; Debt financing behavior
학회소식
[2017년 제 1차] Testing Nonlinearity to Models of Pecking Order The
작성자 : 관리자
조회수 : 1061
게시일 :
2017-03-02
