Analysis of the Capital Structure of Latin American Companies in Light of Trade-Off and Pecking Order Theories

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dc.contributor.affiliationPinillos J., Facultad de Ciencias Económicas, Administrativas y Contables, Universidad Libre, Seccional Cúcuta, Cúcuta, 540001, Colombia
dc.contributor.affiliationMacías H., Facultad de Ciencias Económicas y Administrativas, Universidad de Medellín, Medellín, 050026, Colombia
dc.contributor.affiliationCastrillon L., Facultad de Ciencias Económicas y Administrativas, Universidad de Medellín, Medellín, 050026, Colombia
dc.contributor.affiliationEslava R., Facultad de Ciencias Económicas, Administrativas y Contables, Universidad Libre, Seccional Cúcuta, Cúcuta, 540001, Colombia
dc.contributor.affiliationDe la Cruz S., Facultad de Ciencias Económicas y Empresariales, Universidad de Pamplona, Pamplona, 530001, Colombia
dc.contributor.authorPinillos J.
dc.contributor.authorMacías H.
dc.contributor.authorCastrillon L.
dc.contributor.authorEslava R.
dc.contributor.authorDe la Cruz S.
dc.date.accessioned2025-09-08T14:23:44Z
dc.date.available2025-09-08T14:23:44Z
dc.date.issued2025
dc.descriptionThe study of capital structure is one of the most relevant topics in finance because, despite the various theories that seek to explain it, there is still no consensus on the determining factors or the behaviors of financing decisions in companies. This study empirically analyzes the capital structure decisions of Latin American companies during the period of 2013–2023, in light of trade-off and pecking order theories. A panel data methodology was applied to 62 companies, using fixed and random effects models. The results show that, on average, companies correct around 5.80% of the gap between their current and optimal level of indebtedness per period, partially supporting the trade-off theory. However, the effects of the financial deficit on indebtedness are heterogeneous and, in most cases, inconsistent with the pecking order theory, especially in countries such as Colombia. It is concluded that country risk has a marginal influence on debt decisions, and the need to consider each country’s institutional and market particularities when analyzing the dynamics of capital structure in emerging economies is emphasized. © 2025 by the authors.
dc.identifier.doi10.3390/jrfm18070399
dc.identifier.instnameinstname:Universidad de Medellínspa
dc.identifier.issn19118074
dc.identifier.reponamereponame:Repositorio Institucional Universidad de Medellínspa
dc.identifier.repourlrepourl:https://repository.udem.edu.co/
dc.identifier.urihttp://hdl.handle.net/11407/9097
dc.language.isoeng
dc.publisher.facultyFacultad de Ciencias Económicas y Administrativasspa
dc.publisher.programContaduría Públicaspa
dc.relation.citationissue7
dc.relation.citationvolume18
dc.relation.isversionofhttps://www.scopus.com/inward/record.uri?eid=2-s2.0-105011608725&doi=10.3390%2fjrfm18070399&partnerID=40&md5=e2a50ecd33823a3991814143baabf00a
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dc.rights.accesoRestricted access
dc.rights.accessrightsinfo:eu-repo/semantics/restrictedAccess
dc.sourceJournal of Risk and Financial Management
dc.sourceJ. Risk. Financ. Manag.
dc.sourceScopus
dc.subjectCapital structure
dc.subjectData panel
dc.subjectLatin America
dc.subjectLeverage
dc.subjectPecking order theory
dc.subjectTrade-off theory
dc.titleAnalysis of the Capital Structure of Latin American Companies in Light of Trade-Off and Pecking Order Theories
dc.typeArticle
dc.type.localArtículospa
dc.type.versioninfo:eu-repo/semantics/publishedVersion

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