Įmonių kapitalo struktūros formavimo pagal pasirinkimo eilės teoriją testavimo metodika

Abstract

Pecking order theory is frequently compared with the Trade-off, Market timing, and Agency theories. Trade-off Theory is linked to the ratio of debt and equity via the gain of profit tax shield. And when we are talking about the Pecking order theory, the internal funds are the priority. When the Pecking order theory is compared to the Market timing theory, one similarity is observed: both theories neglect the optimal capital structure. There are some aspects in which the Agency theory is similar to the Pecking order theory. One of the similarities between the theories is that they both convey about the existence of information asymmetry between the company’s management and shareholders. Two stages are undertaken to test the behaviour of the companies under the pecking order theory. The first stage is to assess whether the company uses retained earnings as an internal source of financing investment. Adoption of the hypothesis can be confirmed by the assumption that the investment is equal to the company's retained earnings as a source of internal funding. If the hypothesis is rejected, this means that the company does not have sufficient retained earnings to finance investment, and it is likely that it will look for external sources of funding. If the company has an investment demand that is higher than retained earnings, then it is admitted to the second stage of the investigation. During the second stage of the research it is examined whether the chosen company behaves according to a priority under pecking order theory when using an external financing: firstly, the investments are financed by borrowed capital and then the shares are issued.