Journal articles: 'Trade Off Theory'

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Umdiana, Nana, and Hashifa Claudia. "Struktur Modal Melalui Trade Off Theory." Jurnal Akuntansi Kajian Ilmiah Akuntansi (JAK) 7, no. 1 (2020): 52. http://dx.doi.org/10.30656/jak.v7i1.1930.

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Haddad, Kamal, and Babak Lotfaliei. "Trade-off theory and zero leverage." Finance Research Letters 31 (December 2019): 165–70. http://dx.doi.org/10.1016/j.frl.2019.04.011.

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Singh, Priyanka, and Brajesh Kumar. "Trade-off Theory vs Pecking Order Theory Revisited." Journal of Emerging Market Finance 11, no. 2 (2012): 145–59. http://dx.doi.org/10.1177/0972652712454514.

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Agyei, James, Shaorong Sun, and Eugene Abrokwah. "Trade-Off Theory Versus Pecking Order Theory: Ghanaian Evidence." SAGE Open 10, no. 3 (2020): 215824402094098. http://dx.doi.org/10.1177/2158244020940987.

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The objective of this study was to examine the theoretical predictions of the pecking order theory and the trade-off theory to establish which of the two competing theories better explains the financing decisions of small and medium enterprises (SMEs). The study examined 187 SMEs in Ghana using the panel data methodology. The results reveal that the explanatory power of both theories apply and are pertinent to Ghanaian SMEs. The results also show that profitability, age, liquidity, growth, size, and tangibility of assets all have a significant impact on SMEs’ capital structure. In addition, the findings show that risk plays no vital role in how SMEs choose their capital structure. Broadly, the results provide evidence to back the pecking order theory, indicating that Ghanaian SMEs’ funding decisions exhibit the theoretical predictions of the pecking order theory.

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HASHEMI-TILEHNOUEI, MOSTAFA, and B. SHIVARAJ B. SHIVARAJ. "Traditional Trade-off V/S Pecking Order, Which is a Better Theory." International Journal of Scientific Research 3, no. 7 (2012): 266–68. http://dx.doi.org/10.15373/22778179/july2014/85.

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Hackbarth, Dirk, Christopher A. Hennessy, and Hayne E. Leland. "Can the Trade-off Theory Explain Debt Structure?" Review of Financial Studies 20, no. 5 (2007): 1389–428. http://dx.doi.org/10.1093/revfin/hhl047.

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Stufken, John, and Kui-Jang Wang. "Factorial designs and the theory of trade-off." Statistics & Probability Letters 15, no. 5 (1992): 369–72. http://dx.doi.org/10.1016/0167-7152(92)90155-x.

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Wikartika, Ira, and Zumrotul Fitriyah. "Pengujian Trade Off Theory dan Pecking Order Theory di Jakarta Islamic Index." BISMA (Bisnis dan Manajemen) 10, no. 2 (2018): 90. http://dx.doi.org/10.26740/bisma.v10n2.p90-101.

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The operations of the company are always faced with the problem of meeting the needs of funds. Company funding is closely related to the selection and combination of internal funding sources and external funding sources. The funding decision of the capital structure determines the company in carrying out its operating activities that affect the company's value. There are two perspectives in determining the funding decision of capital structure, namely trade-off theory and pecking order theory. This study aims to analyze the effect of capital structure funding decision variables according to the perspective of trade-off theory and pecking order theory on funding decision of capital structure. The study population used companies listed in the Jakarta Islamic Index. The sample used is 30 companies during the period of June to November 2016. The result shows that according to trade-off theory, firm size and growth influence to leverage, but tangible fixed assets and profitability have no effect on leverage. While according to pecking order theory perspective, it shows that only variable of growth that influence to leverage. Thus it can be concluded that companies in Jakarta Islamic Index tend to follow trade-off theory perspective.

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Culata, Priska Ralna Eunike, and Tri Gunarsih. "Pecking Order Theory and Trade-Off Theory of Capital Structure: Evidence from Indonesian Stock Exchange." Winners 13, no. 1 (2012): 40. http://dx.doi.org/10.21512/tw.v13i1.666.

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Numerous empirical studies in the finance field have tested many theories for firms’ capital structure. The pecking order theory and the trade-off theory of capital structure is among the most influential theories of firms’ capital structure. The trade-off theory predicts optimal capital structure, while the pecking order theory does not predict an optimal capital structure. According to pecking order theory, the order of financial sources used is the source of internal funds from profits, short-term securities, debt, preferred stock and common stock last. The main objective of this study is to econometrically test whether the listed companies in Indonesian Stock Exchange follow the pecking order theory or the trade-off theory. Samples in this study are public companies listed during 2009-2010. The research questions are tested by running regression models. The empirical result of this study shows that the pecking order theory is not supported, while the trade-off theory is supported. This suggests that the capital structure of listed companies in Indonesian Stock Exchange is financed based on optimal capital structure, not by the order financial resources.

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Bukalska, Elżbieta. "Testing trade-off theory and pecking order theory under managerial overconfidence." International Journal of Management and Economics 55, no. 2 (2019): 99–117. http://dx.doi.org/10.2478/ijme-2019-0008.

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Abstract We address our research to the problem of managerial overconfidence and financing behavior. The aim of the paper is, hence, to ascertain the pattern of financing decisions of overconfident managers and identify the relevant capital structure theory (trade-off or pecking order theory) that can be used to explain financing decisions of overconfident managers. We collected a sample of 145 private companies. The degree of overconfidence was distinguished by surveying the managers on overestimation, overplacement, and overoptimism. The financial data covers the period of 2010–2015. We calculated static ratios of capital structure and uncovered the determinants of capital structure. We then unveiled the target debt ratios using Fama and French methodology and identified the difference between target and actual debt ratios. We also calculated the value of deficit and the sources of financing according to Shyam-Sunder and Myers. We found that the companies managed by overconfident managers use higher value of equity and display similar debt ratios. They also utilize reverse pecking order preference—trying to use internal funds and then turning to equity. Moreover, we noted that companies managed by overconfident managers come closer to target debt ratios and implement more risky fixed assets financing strategies. The significance of our research is that we contribute to the understanding of capital structure decisions by taking into account behavioral biases and conducting comprehensive research on both static and dynamic capital structure.

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Serrasqueiro, Zélia, and Ana Caetano. "TRADE-OFF THEORY VERSUS PECKING ORDER THEORY: CAPITAL STRUCTURE DECISIONS IN A PERIPHERAL REGION OF PORTUGAL." Journal of Business Economics and Management 16, no. 2 (2014): 445–66. http://dx.doi.org/10.3846/16111699.2012.744344.

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This paper seeks to analyse whether the capital structure decisions of Small and Medium-Sized Enterprises (SMEs) are closer to the assumptions of Trade-Off Theory or to those of Pecking Order Theory. We use a sample of SMEs located in the interior region of Portugal, using the LSDVC dynamic estimator as method of estimation, the empirical evidence obtained allows us to conclude that the most profitable and oldest SMEs resort less to debt, which corroborates the forecasts of Pecking Order Theory. SMEs, with greater size, resort more to debt, corroborating the forecasts of Trade-Off Theory and Pecking Order Theory. In addition, SMEs adjust noticeably their current level of debt towards the optimal debt ratio, which corroborates what is forecast by Trade-Off Theory. Therefore, this paper enhances that Trade-Off and Pecking Order Theories are not mutually exclusive in explaining the capital structure decisions of SMEs. The results suggest that younger and smaller SMEs should be object of public financing support, when the internal financing is clearly insufficient to fund those firms’ activities.

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Voronin, Albert N. "Trade-Off and Consensus in Vector-Valued Optimization Theory." Journal of Automation and Information Sciences 33, no. 9 (2001): 10. http://dx.doi.org/10.1615/jautomatinfscien.v33.i9.20.

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13

ABEL, ANDREW B. "Optimal Debt and Profitability in the Trade-Off Theory." Journal of Finance 73, no. 1 (2017): 95–143. http://dx.doi.org/10.1111/jofi.12590.

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Nicodano, Giovanna, and Luca Regis. "A trade-off theory of ownership and capital structure." Journal of Financial Economics 131, no. 3 (2019): 715–35. http://dx.doi.org/10.1016/j.jfineco.2018.09.001.

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15

Henzler, S., J. Berthold, G. Georgakos, and D. Schmitt-Landsiedel. "Theory of circuit block switch-off." Advances in Radio Science 2 (May 27, 2005): 227–32. http://dx.doi.org/10.5194/ars-2-227-2004.

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Abstract. Switching-off unused circuit blocks is a promising approach to supress static leakage currents in ultra deep sub-micron CMOS digital systems. Basic performance parameters of Circuit Block Switch-Off (CBSO) schemes are defined and their dependence on basic circuit parameters is estimated. Therefore the design trade-off between strong leakage suppression in idle mode and adequate dynamic performance in active mode can be supported by simple analytic investigations. Additionally, a guideline for the estimation of the minimum time for which a block deactivation is useful is derived.

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Sakr, Ahmed, and Amina Bedeir. "Firm Level Determinants of Capital Structure: Evidence From Egypt." International Journal of Financial Research 10, no. 1 (2018): 68. http://dx.doi.org/10.5430/ijfr.v10n1p68.

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The purpose of this paper is to investigate the firm level determinants of capital structure of Egyptian publicly traded non-financial firms. The study investigates the firm level determinants of capital structure of Egyptian companies utilising data from the financial statements of 62 listed companies over the time period from 2003 to 2016. The study investigates whether the capital structure decisions in Egypt are closer to the assumptions of Trade-Off Theory, of Pecking Order Theory or of the Agency Cost Theory. The empirical evidence obtained allows us to conclude that Trade-Off and Pecking Order Theories are the most theories to describe the financial behaviour of the Egyptian companies' choice of capital structure whereas there was little evidence to support the agency cost theory.

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Thomassen, Arnold J. W. M., and Ruud G. J. Meulenbroek. "Do we need an encompassing speed/accuracy trade-off theory?" Behavioral and Brain Sciences 20, no. 2 (1997): 322–23. http://dx.doi.org/10.1017/s0140525x97431448.

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Even if we recognize that the delta-lognormal model provides an excellent fit to a large variety of data, the question remains as to what we actually learn from such a model, which could be seen as merely another multiparameter account? Do we welcome such an encompassing account, or do we expect to learn more from the limitations that become apparent when applying dedicated models addressing specific classes of movements?

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Ju, Nengjiu, Robert Parrino, Allen M. Poteshman, and Michael S. Weisbach. "Horses and Rabbits? Trade-Off Theory and Optimal Capital Structure." Journal of Financial and Quantitative Analysis 40, no. 2 (2005): 259–81. http://dx.doi.org/10.1017/s0022109000002301.

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AbstractThis paper examines optimal capital structure choice using a dynamic capital structure model that is calibrated to reflect actual firm characteristics. The model uses contingent claim methods to value interest tax shields, allows for reorganization in bankruptcy, and maintains a long-run target debt to total capital ratio by refinancing maturing debt. Using this model, we calculate optimal capital structures in a realistic representation of the traditional trade-off model. In contrast to previous research, the calculated optimal capital structures do not imply that firms tend to use too little leverage in practice. We also estimate the costs borne by a firm whose capital structure deviates from its optimal target debt to total capital ratio. The costs of moderate deviations are relatively small, suggesting that a policy of adjusting leverage infrequently is likely to be reasonable for many firms.

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Liu, Jinming, and Fred Rahbar. "Project Time-Cost Trade-Off Optimization by Maximal Flow Theory." Journal of Construction Engineering and Management 130, no. 4 (2004): 607–9. http://dx.doi.org/10.1061/(asce)0733-9364(2004)130:4(607).

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Padakandla, Arun, P. R. Kumar, and Wojciech Szpankowski. "The Trade-Off Between Privacy and Fidelity via Ehrhart Theory." IEEE Transactions on Information Theory 66, no. 4 (2020): 2549–69. http://dx.doi.org/10.1109/tit.2019.2959976.

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Umdiana, Nana, and Dyah Lupita Sari. "ANALISIS KEPUTUSAN PENDANAAN TERHADAP STRUKTUR MODAL MELALUI TRADE OFF THEORY." Jurnal Ilmiah Akuntansi Universitas Pamulang 8, no. 2 (2020): 143. http://dx.doi.org/10.32493/jiaup.v8i2.4779.

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This study aims to analyze funding decisions on capital structure through trade off theory in property and real estate companies listed on the Indonesia Stock Exchange for the period 2015-2018. Profitability is measured using the return on equity ratio, asset structure is measured by fixed assets ratio and funding decisions are measured by debt. to equity ratio. The population of this research is property and real estate companies listed on the Indonesia Stock Exchange for the period 2015-2018. The data analyzed is secondary data in financial reports or annual reports. The sample selection used purposive sampling method and the sample obtained in this study were 40 data from 10 companies. In this research, the analytical method used is descriptive statistics, classical assumption test, multiple regression analysis and statistical test. The results of the analysis in this study indicate that there is no effect of profitability on funding decisions, there is an effect of asset structure on funding decisions. This shows that the asset structure influences the company's decision making in funding.

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Martin, Thomas E., Elena Arriero, and Ania Majewska. "A trade-off between embryonic development rate and immune function of avian offspring is revealed by considering embryonic temperature." Biology Letters 7, no. 3 (2011): 425–28. http://dx.doi.org/10.1098/rsbl.2010.1031.

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Long embryonic periods are assumed to reflect slower intrinsic development that are thought to trade off to allow enhanced physiological systems, such as immune function. Yet, the relatively rare studies of this trade-off in avian offspring have not found the expected trade-off. Theory and tests have not taken into account the strong extrinsic effects of temperature on embryonic periods of birds. Here, we show that length of the embryonic period did not explain variation in two measures of immune function when temperature was ignored, based on studies of 34 Passerine species in tropical Venezuela (23 species) and north temperate Arizona (11 species). Variation in immune function was explained when embryonic periods were corrected for average embryonic temperature, in order to better estimate intrinsic rates of development. Immune function of offspring trades off with intrinsic rates of embryonic development once the extrinsic effects of embryonic temperatures are taken into account.

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23

Leeson, Robert. "Early Doubts about the Phillips Curve Trade-Off." Journal of the History of Economic Thought 20, no. 1 (1998): 83–102. http://dx.doi.org/10.1017/s1053837200001607.

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The language of graphical analysis has an immediacy which has proven potent in the dissemination of economic ideas (Solow, 1987, p. 186). J. M. Keynes' General Theory of Employment, Interest and Money contained only one diagram (Keynes, 1936, p. 180), but J. R. Hicks' graphical IS/LM analysis contributed to the popularization of one interpretation of Keynes' message. Paul Samuelson's textbook used many graphs, which may account, in part, for its pedagogical irresistibility (Elzinga, 1992, p. 863). Two graphs, named after A. W. H. Phillips and Arthur Laffer respectively, became particularly influential in post-1960 policy debates. The “theoretical Phillips curve” (Phillips, 1953, p. 31; 1954, p. 308) was of interest mainly to specialists in optimal control theory; and Phillips' second empirical curve (Phillips, 1959) remained unpublished for almost four decades. Yet his first empirical curve (1958) led to policy implications which were accepted by virtually an entire scientific profession almost instantaneously, “with alacrity” (Friedman, 1977, p. 469). It appeared to fill a gap in the Keynesian neoclassical synthesis, and was rapidly adopted by the textbook writers (Samuelson, 1961, p. 383; Lipsey, 1963, p. 438). During the 1960s, it became widely accepted that ongoing inflation would be accompanied by a sustained reduction in unemployment. When inflation came to be associated with increasing rates of unemployment, this reflected adversely on the economics profession in general, and Keynesian economics in particular.

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Gounder, Neelesh, and Biman Chand Prasad. "Regional trade agreements and the new theory of trade." Journal of International Trade Law and Policy 10, no. 1 (2011): 49–63. http://dx.doi.org/10.1108/14770021111116133.

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PurposeThe purpose of this paper is to explore the two issues of regional trade agreements (RTAs) and the new theory of international trade and draw conclusions for Pacific Island countries (PICs). The authors provide a deeper conceptual treatment of the consequences of RTAs and analyse the new theory of international trade to explore its implications for trade policy in PICs.Design/methodology/approachWith regard to RTAs, the argument is developed in the context of the conjecture that questions the benefits from adopting more open trade policies with neighbours while maintaining restrictive policies towards the rest of the world. The authors draw on international and regional analytical literature and on recent modelling work to review critically the possible gains and losses of RTAs for PICs. In the latter issue, the focus is on the roles of imperfect competition and scale economies and their relevance to PICs.FindingsFreeing up trade gradually and unilaterally and realizing the benefits of comparative advantage remains the best way to maximise welfare. PICs could be worse off under a complex system of overlapping RTAs and existence of RTAs by Australia and New Zealand outside the region has the possibility of marginalizing weak PICs economies.Practical implicationsPICs are currently at a critical juncture in terms of trade policy making with various trade agreements being thrown in the region and this paper has the capacity to provide some answers to policy makers on the approach to take.Originality/valueThe paper offers insights into regional trade agreements and the new theory of trade.

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Çerkezi, Mr Sc Anila. "A literature review of the trade−off theory of capital structure." ILIRIA International Review 3, no. 1 (2013): 125. http://dx.doi.org/10.21113/iir.v3i1.103.

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Starting with Modigliani and Miller theory of 1958, capital structure has attracted a lot of attention from different scholars. The main question that they raised where: How do firms choose their capital structure or leverage? Does firm have a target capital structure? What are the main firm’s specific factors or determinants that influence the choice of capital structure? Does the economic conditions of the country (GDP growth rate, inflation rate, base lending rate etc.) influence on the determination of the firm’s level of debt? This paper provides a survey of the literature on trade off theory of capital structure. The aim of this paper is to give useful information in understanding corporate finance and in a particular way the trade-off theory of capital structure. This study represents a theoretical approach which has in focus the literature review of same earlier studies which have proved the existence or not of this theory in different contents. We can conclude that economists have not yet reached a consensus on how to determine the optimal capital structure, the one that would bring the maximization of firm’s value.

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Sung, Tae Kyung. "The Trade-off between Standards and Patents: Theory, Cases, and Solutions." Society for Standards Certification and Safety 9, no. 1 (2019): 53–67. http://dx.doi.org/10.34139/jscs.2019.9.1.53.

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Bowers, Roger G., Andrew Hoyle, Andrew White, and Michael Boots. "The geometric theory of adaptive evolution: trade-off and invasion plots." Journal of Theoretical Biology 233, no. 3 (2005): 363–77. http://dx.doi.org/10.1016/j.jtbi.2004.10.017.

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Gao, Lei. "Staged financing: a trade-off theory of holdup and option value." Journal of Economics 121, no. 3 (2017): 197–237. http://dx.doi.org/10.1007/s00712-017-0524-x.

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Hovakimian, Armen, Ayla Kayhan, and Sheridan Titman. "Are Corporate Default Probabilities Consistent with the Static Trade-off Theory?" Review of Financial Studies 25, no. 2 (2011): 315–40. http://dx.doi.org/10.1093/rfs/hhr101.

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Valentinov, Vladislav. "The Complexity-Sustainability Trade-Off in Niklas Luhmann's Social Systems Theory." Systems Research and Behavioral Science 31, no. 1 (2012): 14–22. http://dx.doi.org/10.1002/sres.2146.

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31

J. Glover, Kristoffer, and Gerhard Hambusch. "The trade-off theory revisited: on the effect of operating leverage." International Journal of Managerial Finance 10, no. 1 (2014): 2–22. http://dx.doi.org/10.1108/ijmf-03-2013-0034.

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Purpose – The purpose of this paper is to investigate the effect of operating leverage, and the subsequent abandonment option available to managers, on the relationship between corporate earnings and optimal financial leverage, thereby providing an alternative (rational) explanation for the observed negative relationship between these two quantities. Design/methodology/approach – Working in a dynamic capital structure setting, where corporate earnings are modelled as an exogenous stochastic process, the paper explicitly adds fixed operating costs to the firm's value optimisation. This introduces a degree of operating leverage (DOL) and a non-zero value to the implicit abandonment option of the firm's manager. Solving for the firm's optimal timing and financing decisions the paper is able to derive the relationship between current corporate earnings and optimal financial leverage for a large class of earnings uncertainty assumptions. The theoretical implications are then tested empirically using a large selection of S&P 500 firms. Findings – The analysis reveals that the manager's flexibility to abandon the project introduces nonlinearities into the valuation that are sufficient to reconcile the trade-off theory with the empirically observed negative earnings/financial leverage relationship. The paper further finds theoretical and empirical evidence of a positive relationship between operating and financial leverage. Originality/value – Previous studies have used mean-reverting earnings as an explanation for the observed negative earnings/financial leverage relationship in a trade-off theory setting. The paper shows that the relationship does not need to be process specific. Instead, it is a direct result of the financial flexibility of managers.

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Sardo, Filipe, and Zelia Serrasqueiro. "Does dynamic trade-off theory explain Portuguese SME capital structure decisions?" Journal of Small Business and Enterprise Development 24, no. 3 (2017): 485–502. http://dx.doi.org/10.1108/jsbed-12-2016-0193.

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Purpose The purpose of this paper is to analyse if capital structure decisions of small- and medium-sized Portuguese firms are in accordance with the predictions of dynamic trade-off theory, more precisely, the speed of adjustment of short-term debt (STD) and long-term debt (LTD) towards the respective target debt ratios. Design/methodology/approach Based on two samples of Portuguese firms, 1,377 small-sized firms and 811 medium-sized firms, dynamic estimators were used for the treatment of data obtained from the Amadeus database for the period 2007-2011. Findings The results indicate that small- and medium-sized firms adjust their STD and LTD ratios towards the respective target ratios. Small- and medium-sized firms present a high-speed adjustment towards the target STD ratio, suggesting that both types of firm face costs of deviating from the target capital structure, which are, probably, greater than the costs of adjustment associated with STD. However, considering the distance from the target ratio as a determinant of the adjustment speed, the results show the predominance of the negative effect of the costs of adjustment on capital structure adjustment speeds. Originality/value The results obtained for the speed of adjustment of STD and LTD, in a recession context, show that for small firms and medium-sized firms, mainly for the former, the costs of external market transactions are prohibitively high, slowing the speed of adjustment towards the target capital structure.

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Canarella, Giorgio, Mahmoud Nourayi, and Michael J. Sullivan. "An alternative test of the trade-off theory of capital structure." Contemporary Economics 8, no. 4 (2014): 365–86. http://dx.doi.org/10.5709/ce.1897-9254.151.

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Ivashkovskaya, Irina, and Maria Solntseva. "The Capital Structure of Russian Companies: Testing Trade-off Theory Versus Pecking Order Theory." Journal of Corporate Finance Research / Корпоративные Финансы | ISSN: 2073-0438 1, no. 2 (2010): 17–31. http://dx.doi.org/10.17323/j.jcfr.2073-0438.1.2.2007.17-31.

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Вопросы формирования структуры капитала в российских компаниях остаются не исследованными с позиций современной финансовой теории. В статье показаны результаты эмпирических тестов двух наиболее распространенных концепций – компромиссной и порядка выбора источников финансирования - на примере панельных данных 62 крупных российских компаний, охватывающих 9 отраслей. Исследование выполнено в рамках Научно-учебной лаборатории корпоративных финансов факультета экономики ГУ-ВШЭ как проект направления «Создание и управление стоимостью компании в новой экономике». Построенные эконометрические модели опираются на методы эмпирического анализа структуры капитала компании на растущих рынках, а также тесты данных концепций на материалах развитых рынков капитала. Выявлены детерминанты структуры капитала. Проведенные тесты и проверки на устойчивость по всей панели не позволяют отклонить ни одну из концепций. Анализ на подвыборках показал, то применительно к компаниям с высоким уровнем долга, существенно увеличиваются коэффициенты при внутреннем дефиците финансовых средств, в части регрессий становится незначимым свободный член, что позволяет считать, что им более соответствует логика концепции «порядка финансирования». Результаты показывают, что данная концепция описывает выбор структуры капитала в подвыборке компаний с государственной собственностью. Более высокая объясняющая сила этой концепции очевидна и по результатам тестирования подвыборки публичных компаний.

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Serrasqueiro, Zélia Silva, Manuel Rocha Armada, and Paulo Maçãs Nunes. "Pecking Order Theory versus Trade-Off Theory: are service SMEs’ capital structure decisions different?" Service Business 5, no. 4 (2011): 381–409. http://dx.doi.org/10.1007/s11628-011-0119-5.

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Camfield, Claudio Eduardo Ramos, Guilhermina Maria da Silva Freitas, Marco Rafael Fernandes Correia, and Zélia Serrasqueiro. "A estrutura de capital de empresas de pequena dimensão em Portugal: uma abordagem segundo as teorias do Trade-off e da Pecking-order." RACE - Revista de Administração, Contabilidade e Economia 17, no. 1 (2018): 365–88. http://dx.doi.org/10.18593/race.v17i1.15434.

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Resumo: No corrente estudo analisaram-se os fatores explicativos das decisões de estrutura de capital das Pequenas Empresas (PEs) portuguesas, dado a estrutura de capital destas ter um interesse relevante ao nível econômico-social geral. Neste trabalho centrou-se na teoria Pecking-order (POT) e na teoria do Trade-off, considerando-as mutuamente explicativas e complementares, para avaliar o papel de um conjunto de fatores divididos em três níveis: os internos à empresa, os ligados ao mercado e os ligados ao sistema fiscal. Com base em uma amostra de 2.329 PEs portuguesas, os dados foram sujeitos a uma regressão multivariada. Os resultados obtidos mostram que a rentabilidade, a liquidez e a idade têm um impacto negativo e significativo no endividamento, evidenciando a importância dos princípios da teoria Pecking-order para as decisões de estrutura de capital das empresas portuguesas de menor dimensão. O relacionamento positivo entre a variável dimensão da empresa e o endividamento dá algum suporte à importância da teoria do Trade-off em contexto das decisões de estrutura de capital das pequenas empresas.Palavras-chave: Teoria Pecking-order. Teoria do Trade-off. Endividamento. Portugal. The small firms’ capital structure in Portugal: an approach to the Trade-off and Pecking-order theories Abstract: The present study analyzes the explanatory factors of the capital structure decisions of the Portuguese Small Companies (PEs), given that the capital structure of these companies has a relevant interest in the general economic-social level. This paper focuses on the Pecking-order (POT) theory and the Trade-off theory, considering them mutually explanatory and complementary, to evaluate the role of a set of factors divided into three levels: the internal to the company, market and the tax system. Based on a sample of 2.329 portuguese PEs, data were submitted to a multivariate regression. The results obtained show that profitability, liquidity and age have a significant impact on indebtedness, evidencing the importance of the principles of the pecking-order theory for the capital structure decisions of smaller portuguese firms. The positive relationship between the firm's variable size and indebtedness supports the importance of Trade-off theory in the context of the capital structure decisions of the companies analyzed.Keywords: Pecking-order theory. Trade-off theory. Debt. Portugal.

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Seebacher, Frank, Varlérie Ducret, Alexander G. Little, and Bart Adriaenssens. "Generalist–specialist trade-off during thermal acclimation." Royal Society Open Science 2, no. 1 (2015): 140251. http://dx.doi.org/10.1098/rsos.140251.

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The shape of performance curves and their plasticity define how individuals and populations respond to environmental variability. In theory, maximum performance decreases with an increase in performance breadth. However, reversible acclimation may counteract this generalist–specialist trade-off, because performance optima track environmental conditions so that there is no benefit of generalist phenotypes. We tested this hypothesis by acclimating individual mosquitofish ( Gambusia holbrooki ) to cool and warm temperatures consecutively and measuring performance curves of swimming performance after each acclimation treatment. Individuals from the same population differed significantly in performance maxima, performance breadth and the capacity for acclimation. As predicted, acclimation resulted in a shift of the temperature at which maximal performance occurred. Within acclimation treatments, there was a significant generalist–specialist trade-off in responses to acute temperature change. Surprisingly, however, there was also a trade-off across acclimation treatments, and animals with greater capacity for cold acclimation had lower performance maxima under warm conditions. Hence, cold acclimation may be viewed as a generalist strategy that extends performance breadth at the colder seasons, but comes at the cost of reduced performance at the warmer time of year. Acclimation therefore does not counteract a generalist–specialist trade-off and, at least in mosquitofish, the trade-off seems to be a system property that persists despite phenotypic plasticity.

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Rahmawati, Ika Yustina. "PENGARUH PROFITABILITAS, SIZE DAN GROWTH TERHADAP STRUKTUR MODAL PADA INDUSTRI BARANG KONSUMSI YANG DIDASARI OLEH PECKING ORDER THEORY DAN TRADE-OFF THEORY." Media Ekonomi 16, no. 2 (2016): 229. http://dx.doi.org/10.30595/medek.v16i2.1753.

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This study aims to determine the effect of profitability, size and growth of the company's capital structure in the consumer goods industry sector based on the pecking order theory and trade-off theory. This research was conducted using the procedure panel data for a sample of 26 consumer goods industry sector companies listed on the Indonesia Stock Exchange during 2009- 2013. The findings of this study is to support H1a, H2b and H3b. based on the results of the analysis of the profitability variable (measured ROE) there is a negative correlation significant at α = 5%, which means supporting the pecking order theory. The size variable (as measured by total assets) and growth (which was measured by the Market to Book Value) positively associated significant at α = 5% and 10%, which means supporting the trade-off theory. For the selection method of FEM and REM, researchers used a test in which the capital REM Test Hausmant be an option for the measurement of capital structure (DER, DAR and Working capital) while FEM selected for the measurement of capital structure (Leverage). Keyword: profitability, size, growth, capital struktur, pecking order theory and trade-off theory

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Banerjee, Abhijit V., Sylvain Chassang, Sergio Montero, and Erik Snowberg. "A Theory of Experimenters: Robustness, Randomization, and Balance." American Economic Review 110, no. 4 (2020): 1206–30. http://dx.doi.org/10.1257/aer.20171634.

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This paper studies the problem of experiment design by an ambiguity-averse decision-maker who trades off subjective expected performance against robust performance guarantees. This framework accounts for real-world experimenters’ preference for randomization. It also clarifies the circumstances in which randomization is optimal: when the available sample size is large and robustness is an important concern. We apply our model to shed light on the practice of rerandomization, used to improve balance across treatment and control groups. We show that rerandomization creates a trade-off between subjective performance and robust performance guarantees. However, robust performance guarantees diminish very slowly with the number of rerandomizations. This suggests that moderate levels of rerandomization usefully expand the set of acceptable compromises between subjective performance and robustness. Targeting a fixed quantile of balance is safer than targeting an absolute balance objective. (JEL C90, D81)

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Cooter, Robert D. "Rawls's Lexical Orderings Are Good Economics." Economics and Philosophy 5, no. 1 (1989): 47–54. http://dx.doi.org/10.1017/s0266267100002261.

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Basic liberty, according to Rawls's first principle of justice, is not to be sacrificed for other values such as wealth. And, according to his second principle of justice, the material well-being of the worst-off members of society is not to be sacrificed to benefit better-off members of society. These trade-offs would be unjust, according to Rawls, no matter how small the sacrifice or how large the offsetting benefit. A decision-maker conforming to Rawls's theory, who is unwilling to sacrifice some values in favor of others, has lexical preferences. Lexical preferences, however, are not encountered in studies of consumer demand for market goods. Since goods trade off within the range of choices studied in demand theory, it seems to economists that political values ought to trade off as well.

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Chaklader, Barnali, and Deepak Chawla. "A Study of Determinants of Capital Structure through Panel Data Analysis of Firms Listed in NSE CNX 500." Vision: The Journal of Business Perspective 20, no. 4 (2016): 267–77. http://dx.doi.org/10.1177/0972262916668700.

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This study contributes to the capital structure literature by investigating the determinants of capital structure of firms listed in NSE CNX 500. The period of the study is 2008–2015, the period starting from the year of global slowdown. This study is an attempt to study the capital structure of firms listed in National Stock Exchange in the post liberalization period. The objectives of the study are to study the impact of independent variables such as growth, profitability, tangibility, liquidity, size and non-debt tax shield on financial leverage and also to find out whether the results are in line with the pecking order theory or the trade-off theory of capital structure. Size is taken as a control variable. Our study supports the trade-off theory for all variables such as growth, profitability, size tangibility and non-debt tax shield. Liquidity is the only independent variable that goes in accordance with the pecking order theory. Thus, this study is more inclined towards the trade-off theory.

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Nickel, Jordan, Ada Hurst, and P. Robert Duimering. "MODELLING DESIGN TRADE-OFFS USING A SET THEORY APPROACH: ALTERNATIVE PATHS FOR NAVIGATING TRADE-OFF SITUATIONS." Proceedings of the Design Society 1 (July 27, 2021): 2177–86. http://dx.doi.org/10.1017/pds.2021.479.

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AbstractThis paper synthesizes concepts from the design creativity and design optimization literatures to develop a conceptual descriptive model of trade-off situations in design. Using a set theory approach, a model of the design space is expanded to formalize the description of trade-offs as Pareto frontiers on this space. The modelling of design process and human biases and limitations on the structure of these design spaces explores the perceptions designers form of these design spaces. The model presented describes how altering the framing and formulation of the design space can be used to alter or bypass the original Pareto frontiers of that space, allowing trade-offs to be navigated outside of the original limitations.

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Cheng, Yuxi (Lance), and Ani L. Katchova. "Testing capital structure theories for agricultural cooperatives." International Food and Agribusiness Management Review 22, no. 1 (2019): 1–14. http://dx.doi.org/10.22434/ifamr2018.0050.

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This study investigates adjustments in capital structures for agricultural cooperatives and differences before and during the agricultural downturn which started in 2013. We estimate a simultaneous equation model to test for cooperatives’ capital structure strategies based on two main theories from the corporate finance literature: the trade-off theory and the pecking order theory. Estimation results reveal that agricultural cooperatives in the U.S. generally adjust to short-term financial targets for equity and debt, supporting the trade-off theory while there is little support for the pecking order theory within the agricultural cooperatives sector.

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Freivalds, Rūsiņš, Carl H. Smith, and Mahendran Velauthapillai. "Trade-off among parameters affecting inductive inference." Information and Computation 82, no. 3 (1989): 323–49. http://dx.doi.org/10.1016/0890-5401(89)90005-9.

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Moyo, Vusani, Hendrik Wolmarans, and Leon Brummer. "Trade-Off Or Pecking Order: Evidence From South African Manufacturing, Mining, And Retail Firms." International Business & Economics Research Journal (IBER) 12, no. 8 (2013): 927. http://dx.doi.org/10.19030/iber.v12i8.7989.

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This study tests the trade-off and pecking order hypotheses of corporate financing decisions and estimates the speed of adjustment toward target leverage using a cross-section of 42 manufacturing, 24 mining and 21 retail firms listed on the Johannesburg Stock Exchange (JSE) for the period 2000-2010. It uses the generalised least squares (GLS) random effects, maximum likelihood (ML) random effects, fixed effects, time series regression, Arellano and Bond (1991), Blundell and Bond (1998) and random effects Tobit estimators to fit the two versions of the partial adjustment models. The study finds that leverage is positively correlated to profitability and this supports the trade-off theory. The trade-off theory is further supported by the negative correlation on non-debt tax shields. Consistent with the pecking order theory, capital expenditure and growth rate are positively correlated to leverage while asset tangibility is inversely related to leverage. The negative correlation on financial distress and the positive correlation on dividends paid support both the pecking order and trade-off theories. These results are consistent with the view that the pecking order and trade-off theories are non-mutual exclusive in explaining the financing decisions of firms. The results also show that South African manufacturing, mining and retail firms do have target leverage ratios and the true speed of adjustment towards target leverage is 57.64% for book-to-debt ratio and 42.44% for market-to-debt ratio.

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Dereeper, Sebastien, and Quoc Trinh. "Trade-Off Theory or Pecking Order Theory with a State Ownership Structure: The Vietnam Case." International Review of Business Research Papers 11, no. 1 (2015): 114–32. http://dx.doi.org/10.21102/irbrp.2015.03.111.08.

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HUTCHINGS, MICHAEL R., JOHANNA JUDGE, IAIN J. GORDON, SPIRIDOULA ATHANASIADOU, and ILIAS KYRIAZAKIS. "Use of trade-off theory to advance understanding of herbivore-parasite interactions." Mammal Review 36, no. 1 (2006): 1–16. http://dx.doi.org/10.1111/j.1365-2907.2006.00080.x.

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Sarkar, Sudipto, and Fernando Zapatero. "The Trade‐off Model with Mean Reverting Earnings: Theory and Empirical Tests." Economic Journal 113, no. 490 (2003): 834–60. http://dx.doi.org/10.1111/1468-0297.t01-1-00156.

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Huestis, S. P. "On the existence of degenerate trade-off curves in Backus-Gilbert theory." Geophysical Journal International 102, no. 2 (1990): 503–5. http://dx.doi.org/10.1111/j.1365-246x.1990.tb04483.x.

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Martinez, Lisana B., Valeria Scherger, and M. Belén Guercio. "SMEs capital structure: trade-off or pecking order theory: a systematic review." Journal of Small Business and Enterprise Development 26, no. 1 (2019): 105–32. http://dx.doi.org/10.1108/jsbed-12-2017-0387.

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PurposeThe purpose of this paper is to organize and present the literature related to firm’s capital structure across the years and find the most relevant publications and authors in the research area. Moreover, the authors pretend to fill the gap in the literature by studying different works and their compatibility with the main theories.Design/methodology/approachThe systematic literature review is conducted by using the Scopus database. The methodology applied is through a concise searching considering keywords, the most cited papers, the latest publications and theories that explain small and medium enterprises (SMEs) capital structure.FindingsSome key aspects about the capital structure of firms and SMEs are identified, such as documents per year, type of publications, the most used languages, the top journals, the most cited papers, the most productive and influential authors and the latest published papers.Research limitations/implicationsThe information presented is only informative from the Scopus database. Hence, this work only gives a general orientation of the most relevant research and its tendency of this database. More exhaustive works could be done using different keywords and analyzing other firms’ characteristics.Practical implicationsThis kind of study is effective in evaluating the scientific production and to find the most important contributions of the subject. Furthermore, this information is useful for researchers’ studies on SME capital structure to underline the research direction and to be acquainted with the literature tendency.Originality/valueThere are not similar works that delve into the literature respect to SME capital structure and compare the main theories in relation to empirical works. Therefore, a synthesized evolution of previous works related to the capital structure of firms and SMEs is presented.

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Journal articles on the topic 'Trade Off Theory'

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