Relationship between the pecking order theory and firm's age: Empirical evidences from India

The present work examines the impact of age on the pecking order of deficit and surplus firms. Using empirical evidences, the results indicate that age does not have any significant impact on the pecking order of firms when they have deficits, and firms (across all groups) continue to issue large amount of debt to fill up deficit gaps. While in surplus conditions, old firms followed by middle age firms appear to redeem comparatively more debt vis-a-vis young firms. Being at growing stage, young firms prefer to retain funds more for future financing needs.