{"title":"Does Pecking Order Theory Hold Among Kenyan Firms?","authors":"Douglas M. Wanja, Peter W. Muriu","doi":"10.31014/aior.1992.03.01.205","DOIUrl":null,"url":null,"abstract":"This study examined the pecking order theory of capital structure through annual data of 37 firms listed at the Nairobi Securities Exchange for the period 2011-2016. Estimation results established a positive relationship between changes in debt and investments and a negative relationship between changes in debt and cash flows. Overall, the findings suggest that financial deficits determine net debt issues and hence a strong case for pecking order theory in Kenya in explaining capital structure decisions.","PeriodicalId":367100,"journal":{"name":"ERN: Other Econometrics: Applied Econometric Modeling in Financial Economics - Econometrics of Corporate Finance & Governance (Topic)","volume":"270 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2020-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Other Econometrics: Applied Econometric Modeling in Financial Economics - Econometrics of Corporate Finance & Governance (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.31014/aior.1992.03.01.205","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
This study examined the pecking order theory of capital structure through annual data of 37 firms listed at the Nairobi Securities Exchange for the period 2011-2016. Estimation results established a positive relationship between changes in debt and investments and a negative relationship between changes in debt and cash flows. Overall, the findings suggest that financial deficits determine net debt issues and hence a strong case for pecking order theory in Kenya in explaining capital structure decisions.