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Preference hierarchies for internal finance, bank loans, bond, and share issues: evidence for Dutch firms

  • de Haan, Leo
  • Hinloopen, Jeroen

We consider empirically the incremental financing decisions for a sample of 153 AEX-quoted companies during the years 1984 through 1997. First, we estimate a binomial logit model for the choice between internal and external finance. Second, we estimate a multinomial logit model for the choice between three types of external finance: private loans, bonds and shares. The results provide evidence for the pecking order theory. The issuance behaviour appears not to be consistent with long-term capital structure targets.

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Article provided by Elsevier in its journal Journal of Empirical Finance.

Volume (Year): 10 (2003)
Issue (Month): 5 (December)
Pages: 661-681

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Handle: RePEc:eee:empfin:v:10:y:2003:i:5:p:661-681
Contact details of provider: Web page: http://www.elsevier.com/locate/jempfin

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  19. DeAngelo, Harry & Masulis, Ronald W., 1980. "Optimal capital structure under corporate and personal taxation," Journal of Financial Economics, Elsevier, vol. 8(1), pages 3-29, March.
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