STUDY OF TRADE-OFF AND PECKING ORDER MODELS ON INDEBTEDNESS AND PAYOUT VARIABLES IN BRAZILIAN COMPANIES (2000-2006)

Authors

  • Marcelino David Fundação Armando Álvares Penteado - FAAP
  • Wilson Toshiro Nakamura Universidade Presbiteriana Mackenzie
  • Douglas Dias Bastos Faculdade Santa Marcelina

Keywords:

Structure of capital, Trade-off, Pecking order, Payout, Indebtedness.

Abstract

This study has as reference the works by Fama and French (2002) accomplished with data of North American companies and by Brito and Silva (2003) accomplished with data of Brazilian companies. This work tested the forecasts of the tradeoff and pecking order theories on indebtedness and payout, using the methodology by Fama and McBeth (1973). The results demonstrated that Brazilian companies increased the remuneration goal, however they still distribute a small proportion of the profits, if compared to the American pattern, in spite of the Brazilian legislation to be quite favorable. The results indicate that the payout is negatively related with the investment opportunities and that the dividends don’t suffer variation of short period to accommodate the investments, as it defends the theory of the pecking order. The profitability demonstrated to be relevant in the determination of the indebtedness politics, what indicates that the most profitable companies are less indebted confirming the pecking order. Besides, the variable “size” demonstrated to be significant in the indebted politics, corroborating pecking order and trade-off theories.

 

 

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Author Biographies

Marcelino David, Fundação Armando Álvares Penteado - FAAP

Mestre em Administração de Empresas pelo Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM). Professor do Departamento de Pós-Graduação da Fundação Armando Álvares Penteado (Faap).

Wilson Toshiro Nakamura, Universidade Presbiteriana Mackenzie

Doutor em Administração pela Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo (FEA-USP). Professor do Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM).

Douglas Dias Bastos, Faculdade Santa Marcelina

Mestre em Administração de Empresas pelo Programa do Programa de Pós-Graduação em Administração de Empresas da Universidade Presbiteriana Mackenzie (UPM). Professor do Departamento de Administração da Faculdade Santa Marcelina.

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Published

2009-10-23

Issue

Vol. 10 No. 6 (2009): Thematic Special Editon - Golden Jubilee of Modigliani & Miller

Section

Golden Jubilee of Modigliani & Miller

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