文献信息：文献标题：Financing Preferences of Spanish Firms: Evidence on the Pecking Order Theory（西班牙企业的融资偏好：优序融资理论的实证研究）国外作者：Javier Sánchez-Vidal，Juan Francisco Martín-Ugedo文献出处：《Review of Quantitative Finance & Accounting》, 2005, 25(4):341-355字数统计：英文2111单词，11535字符；中文3840汉字外文文献：Financing Preferences of Spanish Firms: Evidence on thePecking Order TheoryAbstract This paper analyses some of the empirical implications of the pecking order theory in the Spanish market using a panel data analysis of 1,566 firms over 1994–2000. The results show that the pecking order theory holds for most subsamples analyzed, particularly for the small and medium-sized enterprises and for the high-growth and highly leveraged companies. It is also shown that both the more and the less leveraged firms tend to converge towards more balanced capital structures. Finally, we observe that firms finance their funds flow deficits with long term debt.Keywords:capital structure, pecking order theoryIntroductionA prime contribution on information asymmetry in capital structure theory is the Myers and Majluf (1984) model. Myers and Majluf observe that the empirical evidence is not consistent with a financial policy that is determined by a trade-off of the advantages and disadvantages of market imperfections, mainly taxes, costs offinancial distress, and agency costs. Rather, companies’ financial policies seem to be better explained by the behaviour described by Donaldson (1961).He establishes a hierarchy described by company preference for internal funds over external funds; in the case of external funds, a company prefers debt first, then hybrid instruments like convertible bonds, and finally equity issues. This hierarchy, broadly characterized as pecking order theory, indicates that companies do not make financing decisions with the aim of achieving optimal leverage.Although they tend to be taken as the same thing, the pecking order theory and the Myers and Majluf (1984) model are not strictly speaking the same. The pecking order theory i s merely a description of companies’ financing policy, while the Myers and Majluf work represents the first model that attempts to describe this behaviour from a theoretical point of view, based on the presence of information asymmetry. Moreover, the Myers and Majluf (1984)model assumes listed companies and markets where equity is issued through firm commitments, such as the American market, not for markets where the predominant flotation method is rights offerings, such as Spain and most other countries.The aim of this paper is to provide evidence on the pecking order theory in the Spanish market. The analysis takes two directions. First, we examine the evolution of the three largest accounting sources of funding for a company—retained earnings, equity issues and debt—using a model based on Watson and Wilson (2002).Second, we study the role of long-term debt in making up financing deficits, following the flow of funds deficit equation of Shyam-Sunder and Myers(1999).There are several features which distinguish the Spanish financial system from the American one. Probably the main difference affecting the pecking order is the flotation method in equity issues. Equity securities are issued in a wide variety of ways, mainly firm commitments underwritten offers and rights issues. The relative importance of these methods depends on the issuing firm’s country. In the United States rights offerings have declined in frequency, having virtually disappeared by 1980.In Spain, rights prevail. This difference may play an important role in the hierarchy described by the pecking order theory. In addition: (a)debt financing isprimarily raised privately in Spanish firms, thus banks play a very important role; and(b)the Spanish capital market is less developed than the American securities market, having lower capitalization and smaller transaction volumes. Although several papers have already examined the capital structure of Spanish firms, most of them have analyzed the effect of different variables on leverage. However, there is little evidence focusing on pecking order and no study employing the Watson and Wilson (2002) methodology.The results show that small and medium-sized companies behave consistently with predictions of the pecking order theory. When we divide the sample into subsamples on the basis of growth and the level of leverage, we see that high-growth companies base their growth on retained earnings, and firms with very high and very low debt ratios tend to converge towards more moderate debt ratios. Estimation of the flow of funds deficit equation shows that fund deficits are met by the use of long-term debt.The pecking order theory: Theoretical base and empirical evidence The pecking order theory describes a hierarchy in companies’ financial policy as follows: (1)Firms prefer to finance their investments with funds internally generated, namely, retained earnings and depreciation expenses; (2)firms base the dividend payout ratios on the future investment opportunity set and their expected cash flows;(3)payout ratios tend to be sticky in the short term, so in some years internally generated flows will be enough for financing company needs and in some years not;(4)funds obtained in years of financial surpluses, after payment of dividends and financing, are directed to finance short-term financial investments or to reduce debt. When there is a financial deficit, firms will seek external finance: first debt, then hybrid securities like convertible bonds, and finally equity issues.To explain this behaviour Myers and Majluf (1984) construct a model of information asymmetry assuming that firm managers act on behalf of current shareholders. If companies have enough financial slack, they will carry out allinvestments that have a positive net present value. If external funds are needed to finance new investments, the market will interpret equity issues as evidence that company shares are overvalued and thus issue announcement will have a negative impact on the share price.Thus, Myers and Majluf (1984) argue that, if the company does not have enough funds to finance new investments, it will issue equity only when there are very profitable investments that can neither be postponed nor financed through debt, or when managers believe that the stock is overvalued enough that shareholders will be disposed to tolerate the market penalty. The information asymmetry may cause current shareholders to renounce positive net present value investment projects in order to avoid a drop in share price due to the issue of equity, thereby creating an underinvestment problem. To avoid these results, it seems reasonable that companies will implement financing policies that allow them the capacity to finance investments and avoid external financing.However, the Myers and Majluf model (1984) has some limitations. The first is that it applies to markets like the American market where shares are offered mainly through firm commitment underwritings and not through rights issues, which is the flotation method that prevails in most other markets. In an underwritten firm commitment, shares are offered simultaneously to the public at large. Thus, if shares are overvalued, there will be a wealth transfer from new to current shareholders. In rights offerings, current shareholders enjoy priority in the purchase of new shares, which minimizes the possibility of wealth transfers. Therefore, the Myers and Majluf (1984) argument that equity issue is the last choice in firms’ financing policies has little currency in markets where rights issues are the prevalent method of equity issue.Another limitation of the Myers and Majluf (1984) model is that it is generally intended to describe listed companies, leaving the rest, mainly the small and medium-sized enterprises(SME),out of the explanation. Because of this, authors since then have tried to explain the pecking order theory using alternative arguments appropriate to non-listed SME companies.A major problem in SME financing, especially in non-Anglo-Saxon countries, islimited access to capital markets (a finance gap) (Holmes and Kent,1991).Financing choices for SME are thus usually reduced to retained earnings and bank loans. This finance gap can be divided into two components: a supply gap, because of limited availability of funds or higher cost, and a knowledge gap, because of limited knowledge about all the possibilities of external finance and a lack of awareness of the advantages and disadvantages of debt. As a consequence of these two components of the finance gap, the main long-term source of finance will be internal financing and, if necessary, bank loans.Another factor that may play a part in the hierarchy of firm choices is the motivation to retain control of the firm (Holmes and Kent, 1991; Hamilton and Fox, 1998).As we have noted, in a firm commitment offering stock is sold at one time to the general public; thus, current shareholders’ relative ownership of firm, as well as their control of the company may be diminished with new share offerings. Such a control problem may arise also in rights issues, but to a lesser extent, because current shareholders may have limited funds to invest in the first place or may want to diversify their investments, so they might not purchase additional shares to maintain their ownership percentage. As a result of all of this, the current shareholders would also be reluctant to issue equity.These factors mentioned above imply a similar hierarchy to the one described by Myers and Majluf (1984); that is, the company would make use of retained earnings in the first place, then debt (bank loans) and, finally, equity issues.Various authors have tried to test the empirical implications of the pecking order theory. Next, we briefly summarize some of them. Watson and Wilson(2002)use a descriptive model in the British market and confirm the pecking order theory, especially for closely-held companies(companies whose ownership is very concentrated and whose manager is usually the main owner).Shyam-Sunder and Myers(1999)and Frank and Goyal(2003)study the way companies finance their flow of funds deficits. The former authors find evidence to support the pecking order theory; the latter find evidence of a target debt ratio. Mato(1990),in the Spanish market, studies financing flow of fund deficits, using anaccounting identity that includes share issues. He finds that companies tend not to use equity issues, but finance their needs primarily with debt. He also observes that debt and internal finance are mutually substitutable.Fama and French(2002)use structural equations that regress leverage and dividend payout as dependent variables on several explanatory variables from the pecking order theory and the trade-off theory. They find no conclusive evidence in support of one specific theory.Lo′pez-Gracia and Aybar-Arias(2000)use Manova analysis to examine the relationship between variables proposed by the pecking order theory and financial constraints in the Spanish market. They find that the significance of internal finance varies according to company size. Saa′-Requejo(1996)uses a nested model with binary variables for Spanish companies to test the choice between internal or external finance and between equity and debt. He finds that companies care about whether the funds are raised publicly or privately and suffer from similar financial constraints, whether they are holding companies or not.Finally, Holmes and Kent(1991)and Ang and Jung(1992)use mail surveys to try to discern typical company financing policies. Both authors find that company managers follow a hierarchy of funding choices similar to the one described by the pecking order theory. Holmes and Kent(1991)find a stricter pecking order in place at SME than at larger companies.In short, many authors have tried to test the pecking order theory, but the evidence is not conclusive.ConclusionsWe have examined several empirical implications of the pecking order theory for a sample of 1,566 Spanish companies partitioned by size, growth, and previous debt level over 1994–2000.The pecking order theory states that firms follow a hierarchy when financing investments. Companies prefer internal funds to external funds; in case of externalfunds firms prefer debt first, with equity issues being their last choice. Given that Myers and Majluf’s (1984) argument is not valid in explaining this h ierarchy in markets like the Spanish where rights issues prevail, a finance gap and the motivation to retain control could help to explain such a hierarchy in these markets.For the whole sample, we find that retained earnings and debt have similar coefficients, higher than the equity issues coefficient, providing evidence of the duality of retained earnings and debt noted by Holmes and Kent(1991).In the case of different subsamples, small and medium-sized firms do seem to follow the pecking order predictions; the retained earnings coefficient exceeds the debt coefficient, which in turn exceeds the equity issues coefficient. Such results could be explained by a finance gap or by the motivation to retain control.Analysis of subsamples based on firms’ growth and previous debt level shows that these factors are very important in determining companies’ financing policies. High-growth companies resort to retained earnings, and then to debt, and finally to equity issues. That is, these firms follow the pecking order theory. Low-growth firms by contrast take a more balanced approach to financing. Analysis of high-leverage and low-leverage firms indicates these companies move towards more moderate debt levels.Finally, estimation of a flow of funds deficit equation reveals that companies tend to fund their financing deficits mainly with long-term debt.中文译文：西班牙企业的融资偏好：优序融资理论的实证研究摘要本文通过使用1994年—2000年西班牙市场的的1566家企业的固定样本数据分析优序融资理论的实证影响。