IS THERE A PECKING ORDER - EVIDENCE FROM A PANEL OF IPO FIRMS

We test the pecking order model of capital structure by examining the financing of firms that went public in 1983, We estimate a legit to pr edict external financing, and a multinomial legit to predict the type of financing using data on the IPO firms' security offerings during 19 84-1992. Our results indicate that the probability of obtaining extern al funds is unrelated to the shortfall in internally generated funds, although firms with cash surpluses avoid external financing. Firms tha t access the capital markets do not follow the pecking order when choo sing the type of security to offer.