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The Ex-ante/Ex-post Perspectives of the Determinants of Capital Structure: An Integrated Analysis Approach

Received: 20 December 2016     Accepted: 28 December 2016     Published: 21 January 2017
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Abstract

The implementation of capital structure decisions may take place at a point in time, while their effects are realized over time. The predisposition of the capital structure modifying factors as its ‘determining variables’ has an implication of posing the variables as drivers of capital structure decisions. However, the evidence research in corporate finance centres on determining variables ex-post at the influence of positive accounting theory and the presumptions of the tradeoff and pecking order theories. The impact of this perspective is realized in theoretical and operational controversies. This study uses ordinal regression to handle an integrated analysis of lagged variables on debt and investment opportunity financing and managerial subjective data to investigate their impact on capital structure. The outcome is such that there is no emergent pattern to suggest that there is any pecking order or capital structure monitoring, which drives decisions on capital structure a prior. The study suggests an understanding of the ‘determinants of capital structure’ as factors that operate in-situ to modify the proportions of capital and debt in assets through market driven financial transactions.

Published in Journal of Finance and Accounting (Volume 5, Issue 1)
DOI 10.11648/j.jfa.20170501.12
Page(s) 12-23
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Ex-post, Ex-ante, Capital Structure, Integrated Analysis, In-Situ

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Cite This Article
  • APA Style

    Tibuhinda Ngonzi, Andrew Jisaba. (2017). The Ex-ante/Ex-post Perspectives of the Determinants of Capital Structure: An Integrated Analysis Approach. Journal of Finance and Accounting, 5(1), 12-23. https://doi.org/10.11648/j.jfa.20170501.12

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    ACS Style

    Tibuhinda Ngonzi; Andrew Jisaba. The Ex-ante/Ex-post Perspectives of the Determinants of Capital Structure: An Integrated Analysis Approach. J. Finance Account. 2017, 5(1), 12-23. doi: 10.11648/j.jfa.20170501.12

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    AMA Style

    Tibuhinda Ngonzi, Andrew Jisaba. The Ex-ante/Ex-post Perspectives of the Determinants of Capital Structure: An Integrated Analysis Approach. J Finance Account. 2017;5(1):12-23. doi: 10.11648/j.jfa.20170501.12

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  • @article{10.11648/j.jfa.20170501.12,
      author = {Tibuhinda Ngonzi and Andrew Jisaba},
      title = {The Ex-ante/Ex-post Perspectives of the Determinants of Capital Structure: An Integrated Analysis Approach},
      journal = {Journal of Finance and Accounting},
      volume = {5},
      number = {1},
      pages = {12-23},
      doi = {10.11648/j.jfa.20170501.12},
      url = {https://doi.org/10.11648/j.jfa.20170501.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170501.12},
      abstract = {The implementation of capital structure decisions may take place at a point in time, while their effects are realized over time. The predisposition of the capital structure modifying factors as its ‘determining variables’ has an implication of posing the variables as drivers of capital structure decisions. However, the evidence research in corporate finance centres on determining variables ex-post at the influence of positive accounting theory and the presumptions of the tradeoff and pecking order theories. The impact of this perspective is realized in theoretical and operational controversies. This study uses ordinal regression to handle an integrated analysis of lagged variables on debt and investment opportunity financing and managerial subjective data to investigate their impact on capital structure. The outcome is such that there is no emergent pattern to suggest that there is any pecking order or capital structure monitoring, which drives decisions on capital structure a prior. The study suggests an understanding of the ‘determinants of capital structure’ as factors that operate in-situ to modify the proportions of capital and debt in assets through market driven financial transactions.},
     year = {2017}
    }
    

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    AU  - Tibuhinda Ngonzi
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    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
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    AB  - The implementation of capital structure decisions may take place at a point in time, while their effects are realized over time. The predisposition of the capital structure modifying factors as its ‘determining variables’ has an implication of posing the variables as drivers of capital structure decisions. However, the evidence research in corporate finance centres on determining variables ex-post at the influence of positive accounting theory and the presumptions of the tradeoff and pecking order theories. The impact of this perspective is realized in theoretical and operational controversies. This study uses ordinal regression to handle an integrated analysis of lagged variables on debt and investment opportunity financing and managerial subjective data to investigate their impact on capital structure. The outcome is such that there is no emergent pattern to suggest that there is any pecking order or capital structure monitoring, which drives decisions on capital structure a prior. The study suggests an understanding of the ‘determinants of capital structure’ as factors that operate in-situ to modify the proportions of capital and debt in assets through market driven financial transactions.
    VL  - 5
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Author Information
  • Department of Accountancy and Finance, St. Augustine University of Tanzania, Mwanza, Tanzania

  • Department of Accountancy and Finance, St. Augustine University of Tanzania, Mwanza, Tanzania

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