• Title/Summary/Keyword: Small and Medeum Sized Firm

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Determinants of Financing Decisions of the KOSDAQ Firms (코스닥 기업의 자본조달 결정요인)

  • Guahk, Se-Young
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.12 no.12
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    • pp.5663-5670
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    • 2011
  • This study performed empirical analyses of the static trade-off theory and the pecking order theory which explain financing behavior of firms. The results of regression analyses using the data of 762 listed non-financing firms on the KOSDAQ market from 2000 to 2010 have shown mixed evidences supporting either the trade-off theory or the pecking order theory. Specifically, as the effective tax rate and the firm size increases, debt ratio increases, which is consistent with the trade-off theory. However as the growth opportunity and the profitability increases, debt ratio decreases, which is consistent with the pecking order theory.