Technical paper( International corporation) 

This survey is a sequel to the Singh and Hamid's [1992] monograph on corporate financing patterns and structures in nine industrializing economies. Singh and Hamid's was the first large scale research on this subject of developing countries and it yielded quite unexpected results. The two authors discovered that developing country corporation rely in general extremely heavily (a) on external and (b) on new issue of shares to finance the development of net assets. These results are extremely surprisingly as they are opposite to that which most economist would expect. They also suggest almost the reverse of the "pecking order" pattern of finance found in advance economies whereby the latter mostly use retained profits to finance their investment needs; if more finance is required, they have recourse to bank or long-term debt, and only as a last resort go to the stock market.

The present study extends the Singh and Hamid analysis in three ways: (a) it establishes the robustness of their results on much bigger corporate samples for country; (b) it provides a more systematic comparison of corporate financial patterns in industrial and semi-industrial countries; (c) is sets out a theory to explain why developing country corporations use equity capital so extensively to finance the growth of their net assets. 

Includes bibliographical references, illustrations