Financing Asset Sales and Business Cycles*
| Autor: | Marc Arnold, Tatjana Xenia Puhan, Dirk Hackbarth |
|---|---|
| Přispěvatelé: | University of Zurich |
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
Leverage (finance) Asset turnover Collateral media_common.quotation_subject Asset Sales Wealth Transfer Problem Leverage Business Cycles Real Options Financial system jel:E44 Sales journal business studies Accounting Debt 0502 economics and business Business cycle Asset (economics) Sales management Off-balance-sheet media_common 040101 forestry Finance jel:D92 050208 finance business.industry 05 social sciences Equity (finance) 04 agricultural and veterinary sciences jel:G12 Investment (macroeconomics) 10003 Department of Banking and Finance jel:G32 330 Economics jel:G33 Debt-to-equity ratio Internal financing 0401 agriculture forestry and fisheries Risk financing business |
| Zdroj: | Review of Finance. 22:243-277 |
| ISSN: | 1573-692X 1572-3097 |
| Popis: | This paper analyzes the decision of firms to sell assets to fund investments (financing asset sales). For a sample of U.S. manufacturing firms during the 1971-2010 period, we document new stylized facts about financing asset sales that cannot be explained by traditional motives for selling assets, such as financial distress or financing constraints. Using a structural model of financing, investment, and acroeconomic risk, we show that financing asset sales attenuate the debt overhang problem, because asset sale financed investments imply lower wealth transfers from equity to debt than otherwise identical but equity financed investments. This novel motive to reduce the debt overhang problem can explain how financing asset sales relate to firm characteristics and business cycles. We also confirm with simulated panels of model firms that are structurally similar to their empirical counterpart that they indeed feature the dynamic patterns of financing asset sales we observe in the data for real firms. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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