Determinants of capital structure: static trade-off theory vs. pecking-order theory : evidence from Dutch listed firms

The main aim of this paper is to analyze whether the static trade-off theory or the pecking-order theory prevails in capital structure decisions made by Dutch listed firms. The analysis is done by making use of firm-specific determinants that are widely known in the field of capital structure. Evidence in line with research on Dutch firms has been found by making use of a literature review and an OLS-regression. Moreover, this paper finds that the pecking-order theory in capital structure decisions prevail while there is moderate support for the static trade-off theory.