The DOI matches its Crossref record; 42 of the 42 references it cites were found in a registry or an index.
How and When Do Firms Adjust Their Capital Structures toward Targets?
Open accessAbstract
If firms adjust their capital structures toward targets, and if there are adverse selection costs associated with asymmetric information, how and when do firms adjust their capital structures? We suggest a financing needs‐induced adjustment framework to examine the dynamic process by which firms adjust their capital structures. We find that most adjustments occur when firms have above‐target (below‐target) debt with a financial surplus (deficit). These results suggest that firms move toward the target capital structure when they face a financial deficit/surplus—but not in the manner hypothesized by the traditional pecking order theory.
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Cites
Corporate financing and investment decisions when firms have information that investors do not have
Myers, S. C., & Majluf, N. S. (1984) · Journal of Financial Economics · doi:10.1016/0304-405x(84)90023-0 · Cited by 18,957
Econometric Analysis of Panel Data
Baltagi, B. H. (2021) · Springer Texts in Business and Economics · doi:10.1007/978-3-030-53953-5 · Cited by 15,104
Risk, Return, and Equilibrium: Empirical Tests
Fama, E. F., & MacBeth, J. D. (1973) · Journal of Political Economy · doi:10.1086/260061 · Cited by 14,258
Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches
Petersen, M. A. (2009) · Review of Financial Studies · doi:10.1093/rfs/hhn053 · Cited by 10,746
The Determinants of Capital Structure Choice
TITMAN, S., & WESSELS, R. (1988) · The Journal of Finance · doi:10.1111/j.1540-6261.1988.tb02585.x · Cited by 6,112
Market Timing and Capital Structure
Baker, M., & Wurgler, J. (2002) · The Journal of Finance · doi:10.1111/1540-6261.00414 · Cited by 3,672
Testing Trade-Off and Pecking Order Predictions About Dividends and Debt
Fama, E. F., & French, K. R. (2002) · Review of Financial Studies · doi:10.1093/rfs/15.1.1 · Cited by 3,392
Myers, S. C. (1984) · The Journal of Finance · doi:10.2307/2327916 · Cited by 3,141
Capital structure decisions: Which factors are reliably important?
Frank, M. Z., & Goyal, V. K. (2009) · Financial Management · doi:10.1111/j.1755-053x.2009.01026.x · Cited by 2,859
Testing the pecking order theory of capital structure
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Cited by
A Review of Empirical Capital Structure Research and Directions for the Future
Graham, J. R., & Leary, M. T. (2011) · Annual Review of Financial Economics · doi:10.1146/annurev-financial-102710-144821 · Cited by 547
Employment Protection, Investment, and Firm Growth
Bai, J. (., Fairhurst, D., & Serfling, M. (2020) · The Review of Financial Studies · doi:10.1093/rfs/hhz066 · Cited by 282
Working capital financing and corporate profitability of Indian manufacturing firms
Panda, A. K., & Nanda, S. (2018) · Management Decision · doi:10.1108/md-07-2017-0698 · Cited by 75
Boota, M., Riaz, A., Ullah, M. F., & Falzon, J. (2025) · Journal of Asian development studies · doi:10.62345/jads.2025.14.3.143
Metadata
- Authors
- BYOUN, S.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2008-11-11
- Volume
- 63
- Issue
- 6
- Pages
- 3069-3096
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3125402871
- Cited by
- 639
- References
- 42
- FWCI
- 76.78
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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