Where does pecking order collide?

The rank ordering in which each animal in a group can peck or dominate those below it and yields to those above, so that higher-ranked members get priority at food, space, and mates. Schjelderup-Ebbe's 1922 Beiträge zur Sozialpsychologie des Haushuhns observed this ordering in domestic hens and named it the Hackordnung, the peck order, and the English phrase is a translation of that word. The referent here is a hierarchy among living individuals, built and held in place by aggressive encounters and counted by who defeats whom, not the order in which a firm reaches for its funding.[1]

Unit

One individual's position in the group's dominance ranking

Recovery means

The ranking re-forms after further contests or a change in group membership

Measured by

Scored from observed win and loss encounters, often arranged as a dominance matrix and summarised by a linearity index

The order in which a firm prefers to raise money when it needs funds, drawing on retained internal cash first, then borrowing, and issuing new shares only as a last resort. Donaldson's 1961 Corporate Debt Capacity first documented that managers follow this financing preference, and Myers's 1984 The Capital Structure Puzzle, together with Myers and Majluf in the same year, named it the pecking order and tied it to the information gap between managers and outside investors. The referent here is a ranking of funding instruments chosen to limit the cost of that information gap, not a ranking of individual animals by who dominates whom.[2][3][4]

Unit

One firm's ordered list of preferred funding sources

Recovery means

Not applicable

Measured by

Tested by regressing a firm's new debt on its financing deficit, and by the observed pattern of debt versus equity issues