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Debt or equity? An empirical study of security issues by Dutch companies

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  • L. de Haan
  • J. Hinloopen

Abstract

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.

Suggested Citation

  • L. de Haan & J. Hinloopen, 1999. "Debt or equity? An empirical study of security issues by Dutch companies," WO Research Memoranda (discontinued) 577, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:wormem:577
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate finance; discrete choice models;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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