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Corporate financing decisions: UK survey evidence

Research output: Contribution to journalJournal article

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Corporate financing decisions : UK survey evidence. / Beattie, Vivien; Goodacre, Alan; Thomson, Sarah Jane.

In: Journal of Business Finance and Accounting, Vol. 33, No. 9-10, 11.2006, p. 1402-1434.

Research output: Contribution to journalJournal article

Harvard

Beattie, V, Goodacre, A & Thomson, SJ 2006, 'Corporate financing decisions: UK survey evidence', Journal of Business Finance and Accounting, vol. 33, no. 9-10, pp. 1402-1434. https://doi.org/10.1111/j.1468-5957.2006.00640.x

APA

Beattie, V., Goodacre, A., & Thomson, S. J. (2006). Corporate financing decisions: UK survey evidence. Journal of Business Finance and Accounting, 33(9-10), 1402-1434. https://doi.org/10.1111/j.1468-5957.2006.00640.x

Vancouver

Beattie V, Goodacre A, Thomson SJ. Corporate financing decisions: UK survey evidence. Journal of Business Finance and Accounting. 2006 Nov;33(9-10):1402-1434. https://doi.org/10.1111/j.1468-5957.2006.00640.x

Author

Beattie, Vivien ; Goodacre, Alan ; Thomson, Sarah Jane. / Corporate financing decisions : UK survey evidence. In: Journal of Business Finance and Accounting. 2006 ; Vol. 33, No. 9-10. pp. 1402-1434.

Bibtex

@article{01244b857988462a84ee2ae448a03fef,
title = "Corporate financing decisions: UK survey evidence",
abstract = "Despite theoretical developments in recent years, our understanding of corporate capital structure remains incomplete. Prior empirical research has been dominated by archival regression studies which are limited in their ability to fully reflect the diversity found in practice. The present paper reports on a comprehensive survey of corporate financing decision-making in UK listed companies. A key finding is that firms are heterogeneous in their capital structure policies. About half of the firms seek to maintain a target debt level, consistent with trade-off theory, but 60% claim to follow a financing hierarchy, consistent with pecking order theory. These two theories are not viewed by respondents as either mutually exclusive or exhaustive. Many of the theoretical determinants of debt levels are widely accepted by respondents, in particular the importance of interest tax shield, financial distress, agency costs and also, at least implicitly, information asymmetry. Results also indicate that cross-country institutional differences have a significant impact on financial decisions.",
keywords = "capital structure, survey, trade-off theory, pecking order theory, agency theory, institutional differences",
author = "Vivien Beattie and Alan Goodacre and Thomson, {Sarah Jane}",
year = "2006",
month = nov
doi = "10.1111/j.1468-5957.2006.00640.x",
language = "English",
volume = "33",
pages = "1402--1434",
journal = "Journal of Business Finance and Accounting",
issn = "0306-686X",
publisher = "Wiley-Blackwell",
number = "9-10",

}

RIS

TY - JOUR

T1 - Corporate financing decisions

T2 - UK survey evidence

AU - Beattie, Vivien

AU - Goodacre, Alan

AU - Thomson, Sarah Jane

PY - 2006/11

Y1 - 2006/11

N2 - Despite theoretical developments in recent years, our understanding of corporate capital structure remains incomplete. Prior empirical research has been dominated by archival regression studies which are limited in their ability to fully reflect the diversity found in practice. The present paper reports on a comprehensive survey of corporate financing decision-making in UK listed companies. A key finding is that firms are heterogeneous in their capital structure policies. About half of the firms seek to maintain a target debt level, consistent with trade-off theory, but 60% claim to follow a financing hierarchy, consistent with pecking order theory. These two theories are not viewed by respondents as either mutually exclusive or exhaustive. Many of the theoretical determinants of debt levels are widely accepted by respondents, in particular the importance of interest tax shield, financial distress, agency costs and also, at least implicitly, information asymmetry. Results also indicate that cross-country institutional differences have a significant impact on financial decisions.

AB - Despite theoretical developments in recent years, our understanding of corporate capital structure remains incomplete. Prior empirical research has been dominated by archival regression studies which are limited in their ability to fully reflect the diversity found in practice. The present paper reports on a comprehensive survey of corporate financing decision-making in UK listed companies. A key finding is that firms are heterogeneous in their capital structure policies. About half of the firms seek to maintain a target debt level, consistent with trade-off theory, but 60% claim to follow a financing hierarchy, consistent with pecking order theory. These two theories are not viewed by respondents as either mutually exclusive or exhaustive. Many of the theoretical determinants of debt levels are widely accepted by respondents, in particular the importance of interest tax shield, financial distress, agency costs and also, at least implicitly, information asymmetry. Results also indicate that cross-country institutional differences have a significant impact on financial decisions.

KW - capital structure

KW - survey

KW - trade-off theory

KW - pecking order theory

KW - agency theory

KW - institutional differences

U2 - 10.1111/j.1468-5957.2006.00640.x

DO - 10.1111/j.1468-5957.2006.00640.x

M3 - Journal article

VL - 33

SP - 1402

EP - 1434

JO - Journal of Business Finance and Accounting

JF - Journal of Business Finance and Accounting

SN - 0306-686X

IS - 9-10

ER -