Abstract
The financial choices of SMEs clearly fit the pecking order theory (POT) for three main reasons. Firstly, SMEs undergo a problem of financial gap, in both terms of supply gap and knowledge gap. Secondly, in SMEs there is unity of interests between insiders (i.e. current shareholders and their managers who, very often, are the same individuals), as well as a high information asymmetry between insiders and outsiders (investors). Finally, owners of SMEs strongly avoid relinquishing control, even in case of rights offerings if current shareholders cannot afford to buy extra securities. There is possibility for further research which tries to empirically confirm the relevance of the POT in the context of Italian SMEs.References
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Jensen, M. C. and W. H. Meckling (1976). “Theory of the firm: managerial behavior, agency costs and ownership structure”, in Journal of Financial Management, 3(4), 305-360.
Jordan, J., J. Lowe and P. Taylor (1998). “Strategy and financial policy in UK small firms”, in Journal of Business Finance & Accounting , 25(1/2), 1-27.
Kolodny, R. and D. R. Suhler (1985). “Changes in capital structure, new equity issues, and scale effect”, in Journal of Financial Research, 8(2), 127-136.
Lopez-Gracia J. and C. Aybar-Arias (2000). “An empirical approach to the financial behaviour of small and medium sized companies”, in Small Business Economics, 14, 55-63.
Mahérault L. (2000). “The influence of going public on investment policy: an empirical study of French family-owned businesses”, in Family Business Review, 13(1), 71-79.
Masulis, R. W. and A. N. Korwar (1986). “Seasoned equity offerings: an empirical investigation”, in Journal of Financial Economics, 15(1/2), 91-118.
Mikkelson, W. H. and M. M. Partch (1986). “Valuation effects of security offerings and the issuance process”, in Journal of Financial Economics, 15(1/2), 31-60.
Modigliani, F. and M. H. Miller, (1958). “The cost of capital, corporation finance and the theory of investment”, in American Economic Review, 48(3), 261-297.
Modigliani, F. and M. H. Miller, (1963). “Corporate income taxes and the cost of capital: a correction”, in American Economic Review, 53(3), 443-453.
Muhtaseb, M. R. and G. C. Philippatos (1991). “Determinants of stock price reaction to announcement of equity financing by U.S. firms”, in Applied Financial Economics, 1(2), 61-69.
Myers, S. C. (1984). “The capital structure puzzle”, in Journal of Finance, 39, July, 575-592.
Myers, S. C. and N. S. Majluf (1984). “Corporate financing and investment decisions when firms have information that investors do not have”, in Journal of Financial Economics, 13, 187-221.
Myers, S. C. (2001). “Capital structure”, in Journal of Economic Perspective, 15(2), Spring, 81-102.
Ou, C. and G. W. Haynes (2006). “Acquisition of additional equity capital by small firms – Findings from the National Survey of Small Business Finances”, in Small Business Economics, 27, 157-168.
Ross, S. A. (1977). “The determination of financial structure: the incentive-signalling approach”, in The Bell Journal of Economics, 8, 23-40.
Sànchez-Vidal, J. and J. F. Martìn-Ugedo (2005). “Financing preference of Spanish firms:evidence on the pecking order theory”, in Review of Quantitative Finance and Accounting, 25,
341-355.
Stiglitz, J. E. and A. Weiss (1981). “Credit rationing in markets with imperfect information”, in American Economic Review, 71, 393-410.
Suchard, J. and M. Singh (2006). “The determinants of the hybrid security issuance decision for Australian firms”, in Pacific-Basin Finance Journal, 14, 269-290.
Shyam-Sunder, L. and S. C. Myers (1999). “Testing static tradeoff against pecking order models of capital structure”, in Journal of Financial Economics, 51, 219-244.
Watson, R. and N. Wilson (2002). “Small and medium size enterprise financing: a note on some of the empirical Implications of a pecking order”, in Journal of Business Finance &
Accounting, 29(3/4), 557-578.
Management, 16, 89-104.
Ang, J. S. (1991). “Small business uniqueness and the theory of financial management”, in Journal of Small Business Finance, 1, 1-13.
Akhigbe, A., J. C. Easterwood and R. R. Pettit (1997). “Wealth effects of corporate debt issues: the impact of issuer motivations”, in Financial Management, 26(1), 32-47.
Asquith, P. and D. W. Mullins jr (1986). “Equity issues and offering dilution”, in Journal of Financial Economics, 15(2), 61-89.
Bancel, F. and U. R. Mittoo (2004). “Why do European firms issue convertible debt?”, in European Financial Management, 10(2), 339-374.
Bianco, M. (1997). “Vincoli finanziari e scelte reali delle imprese italiane: gli effetti di una relazione stabile con una banca”, in Angeloni I., V. Conti and F. Passacantando, Le banche e il finanziamento delle imprese, Società Editrice Il Mulino, Bologna.
Bigelli, M., S. Mengoli and S. Sandri (2001). “I fattori determinanti la struttura finanziaria delle imprese italiane: una verifica empirica sulle società quotate”, in Finanza, Marketing e
Produzione, 3-4 (second part), 71-93.
Bonato, L., R. Hamaui and M. Ratti (1993). “Come spiegare la struttura finanziaria delle imprese italiane?”, in Politica Economica, y. IX, n. 1, 49-99.
Bontempi, M. E. (2002). “The dynamic specification of the modified pecking order theory: its relevance to Italy”, in Empirical Economics, 27, 1-22.
Brennan, M. J. (1995). “Corporate finance over the past 25 years”, in Financial Management, 24, 9-22.
Brewer, E., H. Genay, W. E. Jackson and P. R. Worthington (1997). “The securities issues decisions: evidence from small business investment companies”, working paper, Federal
Reserve Bank of Chicago.
Burlacu, R. (2000). “New evidence on the pecking order hypothesis: the case of French convertible bonds”, in Journal of Multinational Financial Management, 10, 439-459.
Buttignon, F. and F. De Leo (1994). “I fattori determinanti la struttura finanziaria: analisi empirica nel caso italiano”, in Finanza, Imprese e Mercati, a. VI, n. 1, 3-23.
Cosh, A. and A. Hughes (1994). “Size, financial structure and profitability”, in A. Hughes and D. J. Storey, Finance and the small firm, Routledge, London.
Cressy, R. and Olofsson C. (1997). “The financial conditions for Swedish SMEs: survey and research agenda”, in Small Business Economics, 9, 179-194.
Dahlstrand, A. L. and D. Cetindamar (2000). “The dynamics of innovation financing in Sweden”, in Venture Capital, 2 (3), 203-221.
Dann, L. Y. and W. H. Mikkelson (1984). “Convertible debt issuance, capital structure change and financing-related information: some new evidence”, in Journal of Financial
Economics, 13(2), 157-186.
De Haan, L. and J. Hinloopen (2003). “Preference hierarchies for internal finance, bank loans, bond, and share issues: evidence for Dutch firms”, in Journal of Empirical Finance, 10, 661-681.
Domenichelli, O. (2007). “Un’analisi dei più recenti sviluppi della teoria del pecking order”, in Piccola Impresa/Small Business - Rivista internazionale di studi e ricerche, 3, 37-56.
Donaldson, G. (1961). “Corporate debt capacity: a study of corporate debt policy and the determinants of corporate debt capacity”, Harvard Business School, Boston.
Eckbo, B. E. (1986). “Valuation effects of corporate debt offerings”, in Journal of Financial Economics, 15(1/2), 119-151.
Gaud, P., E. Jani, M. Hoesli and A. Bender (2005). “The capital structure of Swiss companies: an empirical analysis using dynamic panel data”, in European Financial Management, 11 (1), 51-69.
Giudici, G. and S. Paleari (2000). “The provision of finance to innovation: a survey conducted among Italian technology-based small firms”, in Journal of Small Business
Economics, 14 (1), 37-53.
Hall, G. C., P. J. Hutchinson and N. Michaelas (2004). “Determinants of the capital structure of European SMEs”, in Journal of Business Finance & Accounting, 31(5), 711-728.
Hamilton, R. T. and M. A. Fox (1998). “The financing preferences of small firm owners”, in International Journal of Entrepreneurial Behaviour & Research, 4(3), 239-248.
Harris, M. and A. Raviv (1991). “The theory of capital structure”, in Journal of Finance, 46, 297-355.
Hess, A. C. and S. Bhagat (1986). “Size effects of seasoned stock issues: empirical evidence”, in Journal of Business, 59(4), 567-584.
Hogan, T. and E. Hutson (2005). “Capital structure in new technology-based firms: evidence from the Irish software sector”, in Global Finance Journal, 15, 369-387.
Holmes, S. and P. Kent (1991). “An empirical analysis of the financial structure of small and large Australian manufacturing enterprises”, in Journal of Small Business Finance, 1(2), 141-154.
Hyytinen, A. and M. Pajarinen (2002). “Financing of technology intensive small business: some evidence from the ICT industry”, The Research Institute of the Finnish Economy, Discussion paper N. 813.
Jensen, M. C. (1986). “Agency costs of free cash flow, corporate finance, and takeovers”, in American Economic Review, May, 76(2), 323-329.
Jensen, M. C. and W. H. Meckling (1976). “Theory of the firm: managerial behavior, agency costs and ownership structure”, in Journal of Financial Management, 3(4), 305-360.
Jordan, J., J. Lowe and P. Taylor (1998). “Strategy and financial policy in UK small firms”, in Journal of Business Finance & Accounting , 25(1/2), 1-27.
Kolodny, R. and D. R. Suhler (1985). “Changes in capital structure, new equity issues, and scale effect”, in Journal of Financial Research, 8(2), 127-136.
Lopez-Gracia J. and C. Aybar-Arias (2000). “An empirical approach to the financial behaviour of small and medium sized companies”, in Small Business Economics, 14, 55-63.
Mahérault L. (2000). “The influence of going public on investment policy: an empirical study of French family-owned businesses”, in Family Business Review, 13(1), 71-79.
Masulis, R. W. and A. N. Korwar (1986). “Seasoned equity offerings: an empirical investigation”, in Journal of Financial Economics, 15(1/2), 91-118.
Mikkelson, W. H. and M. M. Partch (1986). “Valuation effects of security offerings and the issuance process”, in Journal of Financial Economics, 15(1/2), 31-60.
Modigliani, F. and M. H. Miller, (1958). “The cost of capital, corporation finance and the theory of investment”, in American Economic Review, 48(3), 261-297.
Modigliani, F. and M. H. Miller, (1963). “Corporate income taxes and the cost of capital: a correction”, in American Economic Review, 53(3), 443-453.
Muhtaseb, M. R. and G. C. Philippatos (1991). “Determinants of stock price reaction to announcement of equity financing by U.S. firms”, in Applied Financial Economics, 1(2), 61-69.
Myers, S. C. (1984). “The capital structure puzzle”, in Journal of Finance, 39, July, 575-592.
Myers, S. C. and N. S. Majluf (1984). “Corporate financing and investment decisions when firms have information that investors do not have”, in Journal of Financial Economics, 13, 187-221.
Myers, S. C. (2001). “Capital structure”, in Journal of Economic Perspective, 15(2), Spring, 81-102.
Ou, C. and G. W. Haynes (2006). “Acquisition of additional equity capital by small firms – Findings from the National Survey of Small Business Finances”, in Small Business Economics, 27, 157-168.
Ross, S. A. (1977). “The determination of financial structure: the incentive-signalling approach”, in The Bell Journal of Economics, 8, 23-40.
Sànchez-Vidal, J. and J. F. Martìn-Ugedo (2005). “Financing preference of Spanish firms:evidence on the pecking order theory”, in Review of Quantitative Finance and Accounting, 25,
341-355.
Stiglitz, J. E. and A. Weiss (1981). “Credit rationing in markets with imperfect information”, in American Economic Review, 71, 393-410.
Suchard, J. and M. Singh (2006). “The determinants of the hybrid security issuance decision for Australian firms”, in Pacific-Basin Finance Journal, 14, 269-290.
Shyam-Sunder, L. and S. C. Myers (1999). “Testing static tradeoff against pecking order models of capital structure”, in Journal of Financial Economics, 51, 219-244.
Watson, R. and N. Wilson (2002). “Small and medium size enterprise financing: a note on some of the empirical Implications of a pecking order”, in Journal of Business Finance &
Accounting, 29(3/4), 557-578.
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