L'évolution des structures financières des grandes entreprises canadiennes

This study deals with the evolution of the financing of large Canadian companies from 1960 to 1994. Part I shows that there hass been no significant increase in total corporate debt in Canada, as there has been in the U.S. Total indebtness increased between 1960 and 1982 and then declined; by 1994, ithad fallen to 500 centesimal points about 1960 levels. Only long-term debt has increased, but this trend has nothing in common with the U.S. Part II of the study deals with the relationship between financing choices on the one hand and economic and market conditions on the other. Financing choices are measured by the proportion of total cash requirements (including depreciation and dividends) covered by each source on financing. Over the entire period, internally generated funds covered an average 61.2% of the cash needs of growing companies, while 20% of needs were financed through long-term debt. Stock issues accounted for only 9.8% of cash requirements, and dividend payments considerably exceeded the amount of money raised from stock issues. The relative use of the various types of financing seems to be closely related to economic conditions. Four models are used to explain the relative use of each type of financing by individual companies and a number of estimation methods are used for a sample containing 7,833 annual observations from 1963 to 1994. The findings are generally consistent with the behaviour described in the Pecking Order Theory.
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