FINANCING OF BRAZILIAN COMPANIES IN THE LIGHT OF PECKING ORDER AND MARKET TIMING THEORIES: EVIDENCE FROM REGIONALITY
DOI:
https://doi.org/10.14392/asaa.2021140204Keywords:
Endividamento. Regiões Brasileiras. Fatores Macroeconômicos. Características das Firmas.Abstract
Goals: This paper aims to understand how macroeconomic factors and firms’ characteristics impact the definition of the Brazilian companies’ capital structure in the regional context.
Method: The study involved 426 non-financial Brazilian companies listed on B3 during the period from 2007 to 2017. In the internal perspective, the variables liquidity, ROE, tangibility and size were used, while, in the external approach, the variables GDP, inflation and periods of crisis, concerning the years 2008 and 2015.
Results: The results reveled that the majority of organizations are located in the southeastern and southern regions (86%), with control by the regions being an important factor in decision making regarding the financing of companies. Also, the Pecking Order theory was corroborated, with respect to the characteristics of firms, since companies tend to prioritize the use of internal resources over third resources, especially during economic recession, when there is a greater impact on corporate profits. However, the Market Timing theory has not been ratified, which suggests that companies do not tend to observe the windows of opportunity for the issue of securities.
Contributions: It is relevant to investigate how companies' financing decisions are impacted by issues that go beyond the firms’ characteristics, in other words, how they are influenced by the environment in which they operate, especially with regard to macroeconomic factors and the regional context. Thus, this research advances in the literature not only because it covers external factors, but also because it considers the regional differences in Brazil.
Downloads
References
Ahuja, B. R., & Kalra, R. (2020). Impact of macroeconomic variables on corporate capital structure: a case of India. Managerial Finance. Vol. ahead-of-print No. ahead-of-print.
Allini, A., Rakha, S., McMillan, D. G., & Caldarelli, A. (2018). Pecking Order and Market Timing Theory in Emerging markets: The case of Egyptian firms. Research in International Business and Finance, 44(1), 297-308.
Azevedo, E. B., Oliveira, A. G., Buch, C. L., Cavalcante Nascimento, T. & Silva, C. L. (2018). Corrupção, governança e desenvolvimento: uma análise seccional de dados para o Brasil. GCG Georgetown University – Universia, 12(1), 48-62.
Baker, M., & Wurgler, J. (2002). Market Timing and Capital Structure. The Journal of Finance, LVII (1).
Bastos, D. D., Nakamura, W. T., & Basso, L. F. C. (2009). Determinantes da Estrutura de Capital das Companhias Abertas na América Latina: Um Estudo Empírico Considerando Fatores Macroeconômicos e Institucionais. Revista de Administração Mackenzie (RAM), 10(6), 47-77.
Bernardo, C. J., Albanez, T., & Securato, J. R. (2018). Fatores Macroeconômicos e Institucionais, Composição do Endividamento e Estrutura de Capital de Empresas Latino-Americanas. Brazilian Business Review, 15(2), 152-174.
Brighetti, E., & Albanez, T. (2019). Decisões de Financiamento de Empresas Brasileiras em Cenários de Crise sob a Perspectiva da Teoria de Pecking Order. In. XVI CONGRESSO USP DE INICIAÇÃO CIENTÍFICA EM CONTABILIDADE, 2019, USP. Anais [....] São Paulo: Universidade de São Paulo.
Cardoso, V. R. S., & Pinheiro, M. C. (2020) Influência da recessão e das variáveis macroeconômicas sobre a estrutura de capital setorial. Revista Contabilidade & Finanças, 31(84), 392-408.
Enright, M. J. (2005). The roles of regional management centers. MIR: Management International Review, 45(1), 83-102.
Frank, M. Z., & Goyal, V. (2009). Capital Structure Decisions: Which Factors Are Reliably Important? Financial Management., 38(1), 1-37.
Franzotti, T. D. A., Valle, M. R. (2020). Impacto de crises sobre investimentos e financiamentos de companhias brasileiras: abordagem no contexto de restrições financeiras. Brazilian Business Review, 17(2), 233-252.
Gil, A. C., Oliva, E. C., Novais, M. B. C., & Silva, E. C. (2013). Fundamentos Científicos da Gestão para o Desenvolvimento da Regionalidade. Revista de Ciências da Administração, 15(35), 68-81.
Greene, W.H. (2002). Econometric Analysis. 5th Edition, Prentice Hall, Upper Saddle River, 802.
Jahanzeb, A. (2013). Trade-Off Theory, Pecking Order Theory and Market Timing Theory: A Comprehensive Review of Capital Structure Theories. Economics Bulletin, 33(1), 1-6.
Kayo, E. K., & Kimura, H. (2011). Hierarchical determinants of capital structure. Journal of Banking & Finance, 35(2), 358-371.
Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261-297.
Muhammad, M., Yet, C. E., Tahir, M., Nasir, A. M. (2020). Capital structure of family firms: the effect of debt and equity market timing. Journal of Family Business Management, Vol. ahead-of-print No. ahead-of-print, 2020.
Myers, S. C. (1984). Capital structure puzzle. The Journal of Finance, 39(3), 575-592.
Myers, S., Majluf, N. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187-222.
Pettinati, A. (2012). Regionalidade e Organizações-Programa de Pós Graduação em Administração da Universidade de São Caetano do Sul, Páginas & Letras, 2012. 250p. Gestão & Regionalidade, 28(83), 129-130.
Pozenato, J. C. (2001). Algumas considerações sobre região e regionalidade. Filosofia: diálogo de horizontes. Caxias do Sul: Educs, 589-591.
Rajan, R. & Zingales, L. (1995). What do we know about capital structure? Some evidence from international data. The Journal of Finance, 50(5), 1421-1460.
Santos, M. A. (2013). Determinantes da estrutura de capital de empresas em diferentes cenários econômicos e institucionais: um estudo comparativo. Dissertação de Mestrado - Departamento de Contabilidade, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto, Universidade de São Paulo, Ribeirão Preto.
Setyawan, I. R. (2011). An Empirical Study on Market Timing Theory of Capital Structure. International Research Journal of Business Studies, 4(2), 103-199.
Uff, R. H. (2010). Região, regionalização e regionalidade: questões contemporâneas. Antares: Letras e Humanidades, 1(3), 02-24.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Advances in Scientific and Applied Accounting
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright for articles published in the ASAA Journal is held by the author, with first publication rights to the journal. By virtue of appearing in this publicly accessible journal, the articles are free to use, with their own attributions, in educational and non-commercial applications. The ASAA Journal will allow the use of published works for non-commercial purposes, including the right to submit the work to publicly accessible databases. Published articles are the authors' full and exclusive responsibility. There are no submission/publishing charges or fees for processing articles (APC).
