Browsing by Subject "Intragroup debt financing"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Publication
    Open Access
    What determines intragroup debt financing? Spanish evidence
    (Universidad de Murcia, Servicio de Publicaciones, 2024) Grau-Vera, David; Sogorb-Mira, Francisco
    In this paper, we examine the determinants of internal or intragroup debt financing and its relationship with other debt funding alternatives, especially external debt. We perform a panel data analysis with a sample of 787 non-financial Spanish companies actively financing their operations with intragroup debt during the six-year period between 2013 and 2018. Our results show that intragroup debt positively depends on size and assets tangibility, but it is negatively related to profitability, age, and growth. We also find that greater intragroup debt funding substitutes a reduction in external debt of as much as a quarter. Furthermore, weidentify a hierarchy of preferences in the selection of different financing pathways, with intragroup debtmuch supporting the pecking order theory than external debt.