Asymmetric Information and Debt Financing: Hie Empirical Importance of Size and Balance Sheet Factors

Autor:	Rajeev Dhawan
Rok vydání:	1997
Předmět:	Tobin's q Microeconomics Economics and Econometrics Net worth Economics Business Management and Accounting (miscellaneous) Balance sheet Asset (economics) Monetary economics Investment (macroeconomics) Capital market Panel data Market liquidity
Zdroj:	International Journal of the Economics of Business. 4:189-202
ISSN:	1466-1829 1357-1516
DOI:	10.1080/758516227
Popis:	In an environment with asymmetric information regarding the outcome of investment activities, the premium on external funds is dependent upon a borrower's financial characteristics. Consequently, a borrower's need for funds and accessibility to the desired amount is interlinked. Using panel data over the 1970–89 period, this study finds that a firm's existing level of indebtedness reduces its current net issuance of long term debt. Bigger firm size, higher net worth and a lower sales to asset ratio alleviate this negative effect. The results suggest that the notion of a stronger balance sheet, which governs a firm's access to the capital market, should be extended to include the non-financial sales to asset ratio variable.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::6eded8893177df3cb2f0dd6dea278ec9 https://doi.org/10.1080/758516227 Zobrazit plný text záznamu