• The Investigation of the Influential Literature Analysis on The Pecking Order Theory researches the categorisation provided in the first assignment of this course. The focus is on explaining how authors of influential articles contributed to the evolution of this research approach.
• Based on the categorisation the papers are evaluated by highlighting their core research approach and result. In a next step this paper tries to link the approaches to present and overall picture of the underlying research area. The author introduces several hypotheses that are tested with help of empirical findings in different papers.
• The Pecking Order Theory is a theoretical concept used in finance research and business related articles. This paper shows that the theory cannot be rejected but is not fully supported. The finance decision of a company are complex and linked with its own history a single concept has not the explanatory power to give a reliable answer.
• Academic articles mainly focus on theoretical concepts. These concepts are not able to reflect the real business world. By trying to get an insight into business, the authors limit themselves by choosing data sets for special areas, companies and period of times only.
• Future research approach need to link the dynamic financial decisions of a company with a more flexible approach towards explaining the capital structure of a firm. Dynamic models are the key to get a reliable insight into managerial behaviour.
• This paper gives a good understanding of how The Pecking Order Theory evolved over time and why academics are still discussing this topic on a broad basis. By linking it to business related articles and hypotheses that are tested, the results delivered here are not biased in one direction.
Inhaltsverzeichnis (Table of Contents)
- Executive Summary
- Introduction
- Simple Example of Using the Pecking Order Theory
- Results from the Influential Literature Analysis
- The Pecking Order Theory in Corporate Finance Research
- The Use of the Pecking Order Theory in Business Decisions
- Testing the Pecking Order Theory
- Hypothesis and Empirical Results
- Concluding Remarks
- References
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper investigates the Pecking Order Theory by analyzing influential literature and exploring how authors have contributed to its evolution. It examines the theory's application in business decisions and analyzes its strengths and limitations through empirical data and hypothesis testing.
- The Pecking Order Theory as a framework for understanding corporate financing decisions
- The evolution of the Pecking Order Theory through influential research
- The practical application of the Pecking Order Theory in business
- Empirical evidence for and against the Pecking Order Theory
- The limitations of the Pecking Order Theory in explaining real-world financial decisions
Zusammenfassung der Kapitel (Chapter Summaries)
- Executive Summary: Provides an overview of the paper's research scope, focusing on the Pecking Order Theory's evolution, empirical analysis, and limitations.
- Introduction: Discusses the challenge of financing profitable projects, highlighting the importance of capital structure decisions and the role of the Pecking Order Theory and Trade Off Theory.
- Simple Example of Using the Pecking Order Theory: Presents a basic numerical example illustrating the interaction between managers and investors in the context of the Pecking Order Theory, providing a practical understanding of the approach.
Schlüsselwörter (Keywords)
This paper focuses on the Pecking Order Theory, its historical development, empirical testing, and limitations in explaining real-world financial decisions. Key concepts include asymmetric information, financing decisions, capital structure, internal funds, debt financing, equity financing, and the trade-off between internal resources and external financing.
- Quote paper
- B.Sc. Marsilius Graf von Ingelheim (Author), 2010, Influential Literature Analysis on the Pecking Order Theory: An Investigation, Munich, GRIN Verlag, https://www.grin.com/document/148555
