Publication detail

Determinants of corporate financing decisions: a survey evidence from Czech firms

Author(s): Ing. Irena Jindřichovská CSc.,
PhDr. Pavel Körner Ph.D.,
Type: IES Working Papers
Year: 2008
Number: 1
Published in: IES Working Papers 2008/1
Publishing place: Prague
Keywords: corporate finance, capital structure, trade-off theory, pecking order theory, transition economies, survey
JEL codes: G32
Suggested Citation: Jindrichovska, J.,Körner, P. (2008). “ Determinants of corporate financing decisions: a survey evidence from Czech firms ” IES Working Paper 1/2008. IES FSV. Charles University.
Grants: 402/05/2123 (2005-2007) Efficiency of Financial Markets and New Basel Capital Accord (NBCA)
Abstract: This paper investigates the empirical evidence on determinants of financing decisions on the pool of respondents among financial managers of Czech firms. The theoretical section provides an overview of prominent contemporary theories on capital structure. Employing Chi-square Sign Test and Logit regression the empirical analysis provides the evidence how the financial managers perceive particular instruments of internal and external financing. We find, that firms follow pecking order theory for working capital financing, however the arguments for pecking order theory in investment financing are not that strong. Firms prefer retained earnings among internal financing instruments and bank loans and leasing among external financing instruments. Finally, the paper discusses the links with practice and some limitations of the results.
Downloadable: WP 2008_1_Jindrichovska, Korner


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