Capital Structure in the Modern World

Miglo, Anton

doi:10.1007/978-3-319-30713-8

Cited by 27 publications

(24 citation statements)

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“…The profitability improvement will enable the company to strengthen better financial autonomy and will minimize the use of debt in its funding. Miglo (2016) states that heretofore pecking order theory is the most relevant theory to explain the correlation between profitability and the capital structure because, at the different financial condition, the company will always choose safe funding first.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…The result of this research supports pecking order theory which states that the higher profitability of a company, then the company will tend to use internal funding. Internal funding is more prioritized by the company with the good financial condition because it has a lower risk compared to other funding decisions (Miglo, 2016). High profitability is considered making the company having good financial autonomy until the company can minimize the use of the external fund in its funding.…”

Section: The Effect Of Profitability Towards the Capital Structurementioning

confidence: 99%

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Determinants of capital structures based on the Pecking Order Theory and Trade-off Theory

Simatupang

Purwanti

Mardiati

2019

Jurnal Keuangan Dan Perbankan

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Determining the decision of the company capital structure is a very important thing because it influences the development of resources potency and the sustainability of a company. Related to deciding on the capital structure, there is still different perception so far between pecking order theory and trade-off theory. This research aims to know the effect of profitability, sales growth, non-debt tax shield, the tangibility of assets, and funding surplus towards the capital structure of non-financial companies listed in Indonesia Stock Exchange (IDX) period 2014-2017. The research method used was Causal-Comparative Research with samples investigated were panel data of 154 non-financial companies experiencing funding surplus with total observation in the amount of 616. The result of this research shows that non-debt tax shield and growth sales do not affect company capital structure. Besides that, funding surplus has a positive effect on the capital structure, while profitability and tangibility assets have a negative effect on the capital structure. Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh antara profitabilitas, pertumbuhan penjualan, non debt tax shield, tangibility of asset, dan surplus pendanaan terhadap struktur modal pada perusahaan non keuangan yang terdaftar di Bursa Efek Indonesia (BEI) periode tahun 2014-2017. Metode penelitian yang digunakan adalah kausal komparatif (Causal-Comparative Research) dengan sampel yang diteliti yaitu 154 perusahaan non keuangan yang mengalami surplus pendanaan. Teknik pengambilan sampel yang digunakan yaitu purposive sampling. Hasil penelitian ini menunjukkan bahwa non-debt tax shield tidak berpengaruh terhadap struktur modal perusahaan. Selain itu, pertumbuhan penjualan, tangibility assets, dan surplus pendanaan memiliki pengaruh yang positif terhadap struktur modal, sedangkan profitabilitas memiliki pengaruh negatif terhadap struktur modal.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Section: The Effect Of Profitability Towards the Capital Structurementioning

confidence: 99%

Determinants of capital structures based on the Pecking Order Theory and Trade-off Theory

Simatupang

Purwanti

Mardiati

2019

Jurnal Keuangan Dan Perbankan

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“…More recently, Miglo (2016) argues that the static trade-off model focuses on bankruptcy cost and debt. This aspect, however, provides an advantage that the pecking order model does not provide.…”

Section: Literature Reviewmentioning

confidence: 99%

Examining pecking order versus trade‐off theories of capital structure: New evidence from Japanese firms

2018

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This study empirically tests the traditional trade‐off model against the pecking order model of capital structure using data from the Japanese listed companies on the Tokyo Stock Exchange. A pooled sample of 1,362 publicly listed nonfinancial companies from 1991 to 2015 is used to establish the relationship between leverage and its determinants by using the generalized methods of moments econometric framework. The results show that the financing pattern of Japanese firms is consistent with the basic pecking order model, which predicts external debt financing driven by the internal financial deficit.

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“…These efforts created other fundamental theories, such as Trade-off theory, Pecking Order theory in determining the composition of capital structure (Chen, 2004 andAfshari Maneh, 2015). The focus of all these theories is the impact of the type of financing source on the value of the company (Miglo, 2016). The following describes each of these theories.…”

Section: Main Connections With the Literaturementioning

confidence: 99%

Determinants of Capital Structure and Speed of Adjustment: Evidence from Iran and Australia

Kythreotis¹,

Nouri²,

Soltani³

2017

IJBA

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This study investigated different companies' capital structures using a comparative approach in a developing country (Iran) and a developed country (Australia). The purpose of this study was to identify the factors affecting the capital structure based on the company's characteristics in Iran and Australia. The main characteristics of the companies used in this research are mainly based on the variables used in Pecking order theory and the Trade-off theory namely tangibility, firm size, profitability, and business risk. Three other variables including liquidity, asset utilization ratio and speed of adjustment were also investigated. Two indicators of total debt ratio and long-term debt ratio have been used as corporate leverage index. The population of this study included 178 Iranian companies listed on Iran's stock exchange and 187 Australian companies listed on Australia's stock exchange from 2009 to 2015. To test the hypotheses, Panel data and Eviews software were used. To ensure robustness of the results, the speed of adjustment was estimated using GMM and OLS (with fixed and random effects).The results of this study showed that dynamic trade-off theory could better explain the changes in capital structure in Iran and Australia. The results also revealed significant differences in factors affecting the capital structure in Iran and Australia.

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Capital Structure in the Modern World

Cited by 27 publications

References 0 publications

Determinants of capital structures based on the Pecking Order Theory and Trade-off Theory

Determinants of capital structures based on the Pecking Order Theory and Trade-off Theory

Examining pecking order versus trade‐off theories of capital structure: New evidence from Japanese firms

Determinants of Capital Structure and Speed of Adjustment: Evidence from Iran and Australia

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