Information asymmetry, monitoring, and the placement structure of corporate debt1We thank David Brown, Mark Carey, Stephane Chretien, Michael Cliff, Hemang Desai, Bob Dittmar, Charles Hadlock, Paisan Limratanamongkol, Karl Lins, Vojislav Maksimovic, Beverly Marshall, David Mauer, Erlend Nier, Russ Robins, Vic Sarna, Richard Shockley, Anjan Thakor, Joaquin Trigueros, Robert Weigand, Marc Zenner, and seminar participants at Texas A&M, Tulane, the 1996 FMA meetings, the 1997 WFA meetings, and the 1998 EFMA meetings for helpful comments. We are especially grateful to David Blackwell (the referee), and Clifford Smith (the editor) for suggestions that have improved the paper substantially.1

Autor: Venkat Subramaniam, Sudha Krishnaswami, Paul A. Spindt
Rok vydání: 1999
Předmět:
Zdroj: Journal of Financial Economics. 51:407-434
ISSN: 0304-405X
DOI: 10.1016/s0304-405x(98)00059-2
Popis: We empirically examine the impact of flotation costs, agency conflicts, regulation, and information asymmetries on a firm's mix between public and private debt. Results indicate that firms with larger issue sizes exploit the scale economies in flotation costs of public debt. Firms with higher contracting costs due to moral hazard have higher proportions of private debt. There is only limited support for the adverse selection hypothesis. We find little evidence that firms with favorable private information about future profitability choose more private debt. However, those firms with favorable information about future profitability that also operate under greater information asymmetry rely more on private debt.
Databáze: OpenAIRE
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