{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/22126"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/22126","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"The impact of new equity financing on firms' investment, dividend and debt-financing decisions","abstract":"Investment, dividend and external financing decisions are the major decisions of a firm. External financing includes the flotation of new common shares and/or new debt. Previous studies on the interrelationships among these three decisions precluded new equity financing in their models. Thus, their models were misspecified. This thesis explicitly incorporates new equity financing into the model by using a two-stage switching regression model to analyze the interactions among investment, dividend and debt financing decisions given the impact of new equity financing. Unlike the previous studies using American data, this study does not reject MM's independence theorem on the relation between the investment and dividend decisions of the firm. However, there is strong evidence that capital structure does affect the investment decision of the firm. Furthermore, this thesis provides evidence to reject John and Williams' (1985) dividend signalling theory. A pecking order theory by Donaldson (1961) and Myers (1984) is supported during the recession 1978 to 1982, but rejected during the prosperity period 1983 to 1987. There is also strong evidence of dividend smoothing for firms.","abstract_html":"Investment, dividend and external financing decisions are the major decisions of a firm. External financing includes the flotation of new common shares and/or new debt. Previous studies on the interrelationships among these three decisions precluded new equity financing in their models. Thus, their models were misspecified. This thesis explicitly incorporates new equity financing into the model by using a two-stage switching regression model to analyze the interactions among investment, dividend and debt financing decisions given the impact of new equity financing. Unlike the previous studies using American data, this study does not reject MM's independence theorem on the relation between the investment and dividend decisions of the firm. However, there is strong evidence that capital structure does affect the investment decision of the firm. Furthermore, this thesis provides evidence to reject John and Williams' (1985) dividend signalling theory. A pecking order theory by Donaldson (1961) and Myers (1984) is supported during the recession 1978 to 1982, but rejected during the prosperity period 1983 to 1987. There is also strong evidence of dividend smoothing for firms.","abstract_has_math":false,"creators":["Yang, Chau-Chen"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Finance","degree_department":null,"school":null,"contributors":["Lee, Cheng F."],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2011,"date_issued":"2011-05-07T13:29:48Z","date_published":"2011-05-07T13:29:48Z","updated_at":"2026-07-22T22:25:19Z","subjects":["Economics, Finance"],"languages":["eng"],"rights":["Copyright 1989 Yang, Chau-Chen"],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier","label":"Identifier","values":["AAI9011080","(UMI)AAI9011080"],"render_values":[{"text":"AAI9011080","href":null,"code":true},{"text":"(UMI)AAI9011080","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/2142/22126","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Lee, Cheng F."]},{"key":"dc:creator","label":"Author","values":["Yang, Chau-Chen"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2011-05-07T13:29:48Z","10000-01-01","1989"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Finance"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Economics, Finance"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["eng"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 1989 Yang, Chau-Chen"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["AAI9011080","(UMI)AAI9011080","http://hdl.handle.net/2142/22126"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["Investment, dividend and external financing decisions are the major decisions of a firm. External financing includes the flotation of new common shares and/or new debt. Previous studies on the interrelationships among these three decisions precluded new equity financing in their models. Thus, their models were misspecified. This thesis explicitly incorporates new equity financing into the model by using a two-stage switching regression model to analyze the interactions among investment, dividend and debt financing decisions given the impact of new equity financing. Unlike the previous studies using American data, this study does not reject MM's independence theorem on the relation between the investment and dividend decisions of the firm. However, there is strong evidence that capital structure does affect the investment decision of the firm. Furthermore, this thesis provides evidence to reject John and Williams' (1985) dividend signalling theory. A pecking order theory by Donaldson (1961) and Myers (1984) is supported during the recession 1978 to 1982, but rejected during the prosperity period 1983 to 1987. There is also strong evidence of dividend smoothing for firms.","Made available in DSpace on 2011-05-07T13:29:48Z (GMT). No. of bitstreams: 2 license.txt: 4922 bytes, checksum: 910b249b4beec47e7ab768910c8f966f (MD5) 9011080.pdf: 5570422 bytes, checksum: 8c1b05352ebea72cc4919d646edc5b6f (MD5) Previous issue date: 1989","Item marked as restricted to the 'UIUC Users [automated]' Group (id=2) by Howard Ding (hding2@illinois.edu) on 2011-05-07T14:55:30Z Item is restricted indefinitely.","Restriction data tranferred 2014-07-01T11:25:52-05:00 Original Data Group with Access UIUC Users [automated] Release Date: none Reason: ETDs are only available to UIUC Users without author permission","ETDs are only available to UIUC Users without author permission","U of I Only"]},{"key":"dc:title","label":"Title","values":["The impact of new equity financing on firms' investment, dividend and debt-financing decisions"]}]}],"canonical_facts":{"dc:contributor":["Lee, Cheng F."],"dc:creator":["Yang, Chau-Chen"],"dc:date":["2011-05-07T13:29:48Z","10000-01-01","1989"],"dc:description":["Investment, dividend and external financing decisions are the major decisions of a firm. External financing includes the flotation of new common shares and/or new debt. Previous studies on the interrelationships among these three decisions precluded new equity financing in their models. Thus, their models were misspecified. This thesis explicitly incorporates new equity financing into the model by using a two-stage switching regression model to analyze the interactions among investment, dividend and debt financing decisions given the impact of new equity financing. Unlike the previous studies using American data, this study does not reject MM's independence theorem on the relation between the investment and dividend decisions of the firm. However, there is strong evidence that capital structure does affect the investment decision of the firm. Furthermore, this thesis provides evidence to reject John and Williams' (1985) dividend signalling theory. A pecking order theory by Donaldson (1961) and Myers (1984) is supported during the recession 1978 to 1982, but rejected during the prosperity period 1983 to 1987. There is also strong evidence of dividend smoothing for firms.","Made available in DSpace on 2011-05-07T13:29:48Z (GMT). No. of bitstreams: 2 license.txt: 4922 bytes, checksum: 910b249b4beec47e7ab768910c8f966f (MD5) 9011080.pdf: 5570422 bytes, checksum: 8c1b05352ebea72cc4919d646edc5b6f (MD5) Previous issue date: 1989","Item marked as restricted to the 'UIUC Users [automated]' Group (id=2) by Howard Ding (hding2@illinois.edu) on 2011-05-07T14:55:30Z Item is restricted indefinitely.","Restriction data tranferred 2014-07-01T11:25:52-05:00 Original Data Group with Access UIUC Users [automated] Release Date: none Reason: ETDs are only available to UIUC Users without author permission","ETDs are only available to UIUC Users without author permission","U of I Only"],"dc:identifier":["AAI9011080","(UMI)AAI9011080","http://hdl.handle.net/2142/22126"],"dc:language":["eng"],"dc:rights":["Copyright 1989 Yang, Chau-Chen"],"dc:subject":["Economics, Finance"],"dc:title":["The impact of new equity financing on firms' investment, dividend and debt-financing decisions"],"dc:type":["text"],"thesis:degree_discipline":["Finance"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:25:19Z"}