The Journal of Fisheries Business Administration (수산경영론집)

The Korean Society of Fisheries Business Administration (한국수산경영학회)
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The Effect of Debt Capacity on the Pecking Order Theory of Fisheries Firms' Capital Structure

수산기업의 부채수용력이 자본조달순서이론에 미치는 영향

  • Nam, Soo-Hyun (Department of Business Administration, Dong-Eui University) ;
  • Kim, Sung-Tae (Department of Business Administration, Dong-Eui University)
  • 남수현 (동의대학교 상경대학 경영학과) ;
  • 김성태 (동의대학교 상경대학 경영학과)
  • Received : 2014.11.12
  • Accepted : 2014.12.19
  • Published : 2014.12.31
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Abstract

We try to test the pecking order theory of Korean fisheries firm's capital structure using debt capacity. At first, we estimate the debt capacity as the probability of assigning corporate bond rating from credit-rating agencies. We use logit regression model to estimate this probability as a proxy of debt capacity. The major results of this study are as follows. Firstly, we can confirm the fisheries firm's financing behaviour which issues new debt securities for financial deficit. Empirical test of SSM model indicates that the higher probability of assigning corporate bond rating, the higher the coefficient of financial deficit. Especially, high probability group follows this result exactly. Therefore, the pecking order theory of fisheries firm's capital structure applies well for high probability group which means high debt capacity. It also applies for medium and low probability group, but their significances are not good. Secondly, the most of fisheries firms in high probability group issue new debt securities for their financial deficit. Low probability group's fisheries firms also issue new debt securities for their financial deficit within the limit of their debt capacity, but beyond debt capacity they use equity financing for financial deficit. Therefore, the pecking order theory on debt capacity come into existence well in high probability group.

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