Hospital's Financing Behaviors Based on Comparative Analysis of Trade-off Theory and Pecking Order Theory

상충관계이론과 자본조달순위이론에 기초한 병원 자본조달행태 분석

Based on a previous literature about hospital capital structure(Shyam- Sunder & Myers, 1999), this study attempted comparison and analysis on whether the forecast of trade-off and pecking order theory could be validated in hospital's capital structure. First, this study analyzed whether hospitals follow the priority for each capital source as suggested by pecking order theory under lack of capital running in hospital. Next, it analyzed whether debt level is regressed on the average to target debt level so as to verify the validity of trade-off theory. Finally, it also analyzed possible associations between debt level and determinants of capital structure as adopted in static trade-off theory, so as to verify relative advantages of these two theories about hospital capital structure. The analysis over whole period showed that both trade-off theory and pecking order theory isn't supported particularly. This mean that each hospital's financing behaviors is different and that has not dominant financing behaviors. In the midst of separation of dispensary from medical practice, medical institutions in Korea first finances funds required using retained earnings and then use liabilities. however pecking order theory is supported, the preference of long-term liabilities and short-term liabilities is not clear. In addition, considering that debt level is in no average regression to target debt ratio, it is found that hospital capital structure following trade-off theory turns into that subject to pecking order theory via the separation of dispensary from medical practice.