Year: 2007
Type: article
Abstract: The aim of this study is to determine which of the two more important theories of the capital structure – Pecking Order Theory and Tradeoff Theory – had the greatest predictive capacity of the level of total debt of the large non quoted Belgian firms. The method of the multiple regression log-lin was used by integrating nine variables able to explain the level of firms’ leverage. The confrontation of the Pecking Order Theory and the Tradeoff Theory shows a great contradiction in the determination of the influence of these nine variables. The results seem to highlight a behavior of the type “hierarchisation of the preferences of financing” on behalf of the large rather non quoted Belgian firms than a behavior of the type “seeks of an optimal capitalization”.JEL Code: G32.
Authors: Olivier Colot, Mélanie Croquet
Language: French
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W1713845356