How do CFOs make capital structure decisions? A survey of Greek listed companies
Abstract
Purpose
The aim of this study is to investigate the corporate financing behaviour of nonfinancial Greek listed companies, focusing on how managers determine optimal capital structure.
Design/methodology/approach
The study analyses the results derived from questionnaires submitted to the companies' chief financial officers (CFOs), using both descriptive and nonparametric statistics.
Findings
The results broadly support the pecking order hypothesis over static trade-off theory. Firms listed on the Athens Stock Exchange prefer to use internal rather than external financing. A deeper examination of the systematic relationship between a number of variables and the financing decision provides tentative support for the existence of asymmetrically distributed information in the market and demonstrates a series of significant correlations among the determinative factors of a new long-term investment.
Originality/value
This paper fills the existing gap between prominent theories of corporate leverage and empirical evidence. The questionnaire collects primary research data that are not available from public sources and reports CFOs' opinions and practices in the field.
Keywords
Acknowledgements
The authors are grateful to all CFOs that participated in this comprehensive survey and ICAP SA for its continuous help in data collection. Moreover, they would like to thank the Associate Editor, Dr Hamid Uddin, and two anonymous referees that have improved the article with their valuable comments. Any remaining errors are the authors' responsibility.
Citation
G. Noulas, A. and Genimakis, G. (2014), "How do CFOs make capital structure decisions? A survey of Greek listed companies", Studies in Economics and Finance, Vol. 31 No. 1, pp. 72-87. https://doi.org/10.1108/SEF-05-2012-0057
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited