Testing the Pecking Order Theory for brazilian publicly listed companies
Financial Economics; Capital structure; Debt
An important field of finance literature deals with the capital structure of companies. One of the main theories of this line of research is the Pecking Order Theory. It establishes a hierarchy of preference on the part of companies among the possible sources of funding for their activities. According to the theory, companies prefer to finance themselves with their own resources, followed by issuing debt and, finally, through issuing shares. The aim of this paper is to empirically analyze the Pecking Order Theory using data from publicly traded Brazilian companies listed on the Brazilian stock exchange (B3).