| Summary: | 碩士 === 國立臺灣大學 === 財務金融組 === 104 === Along with the increasingly developed world trade and the accelerating steps of economic changes, the enterprise has to continuously invest to maintain the business continuity. During the process of continuous investment, the enterprise has to consider various alternatives of financing plan in order to obtain funding at the lowest cost. Based on Pecking Order Theory, enterprises expect to increase the company value and maximize the shareholders’ benefit with lowest cost while raising funds. The enterprise investment opportunity can also be called the growth of business (Myers and Majluf, 1984). However, the enterprise may have different considerations of the funding requirement and allocation when the growth opportunity comes.
This study collected whole Taiwan stock listed companies’ information (2010~2015, totally 6 years) of cash flow statements, balance sheet statements and income statements from Taiwan Economic Journal Database (TEJ) and also referred to the regression model of Shyam-Sunder and Myers(1999) plus adding the multiple regression control variables in it. In addition, according to the characteristic of data, this study used the Panel Data Analysis method which combined the consideration of the tracking of sequence (Time Series) and cross section (Cross-Section) at the same time to execute the regression analysis in order to examine the hypothesis. This study also adopted the Hausman Test put forth by Mundlak in 1978, to evaluate the model should be adopted by the fixing effect or random effect model.
This study identified three hypotheses by empirical probing the relationship between business growth and its debt level.
Conclusion 1:
The stock listed companies in Taiwan may conform the Pecking Order Theory.
Conclusion 2:
High growth enterprises rather bear higher cost to issue new stock shares than borrowing lower cost money from financial institutions when considering funding needs and financial easing policy, which may not conform the Pecking Order Theory.
Conclusion 3:
Low growth enterprises may consider to borrow lower cost money from financial institutions to increase their profitability, which may conform the Pecking Order Theory.
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