Trade-off Theory vs Pecking Order Theory Revisited

Priyanka Singh and Brajesh Kumar
Additional contact information
Priyanka Singh: Priyanka Singh, Fellow, Indian Institute of Management Ahmedabad, Ahmedabad 380015, Gujarat, India
Brajesh Kumar: Brajesh Kumar, Fellow, IIM Ahmedabad, and Assistant Professor, Jindal Global Business School, O.P. Jindal Global University, Sonipat-Narela Road, Near Jagdishpur Village, Sonipat, Haryana 131001, NCR of Delhi, India

Journal of Emerging Market Finance, 2012, vol. 11, issue 2, 145-159

Abstract: This article empirically tests the two competing theories of capital structure: Trade-off theory against Pecking Order theory using the time series hypothesis. This study is performed for an emerging market context taking the case of Indian firms with a sample from 10 industries for the period 1990 to 2007. Our results support the evidence of trade-off theory in the Indian firms (contrary to the results found by Farhat, Cotei and Abugri 2006). The result is consistent for the overall sample as well as for different industries separately. JEL Classification : G32, C23, C33

Keywords: Trade-off theory; pecking order theory; capital structure; emerging market (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0972652712454514 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:11:y:2012:i:2:p:145-159

DOI: 10.1177/0972652712454514

Access Statistics for this article

More articles in Journal of Emerging Market Finance from Institute for Financial Management and Research
Bibliographic data for series maintained by SAGE Publications ().