Explaining the Role of Firm Characteristics on sources of financing mergers and acquisitions based on Pecking Order Theory

The purpose of this study is to explain the role of firm characteristics on corporate merger and acquisition financing based on Pecking Order Theory during the years 2014 to 2018  .In this study, the company's characteristics are measured from the variable company's size, asset structure, profitability, ratio of interest cost cover, liquidity and Return on assets, and to measure the variable financing methods, using a Pecking Order model of accumulated profit, debt ratio And financial leverage has been used.The results of this study, using regression of combined data, show that the larger the company and the more profitable it is, the company uses less profit from financing its investment projects and turns to external resources.While increasing the return on assets, the company uses more accumulated profits and financial leverage than debt.In other words, companies do not follow a Pecking Order Theory in providing all the funding they need.Also, in this study, no significant relationship was observed between asset structure, ratio of interest cost cover and liquidity with financing sources.