Leverage Adjustment Speed: Evidence in Indonesia
نویسندگان
چکیده
منابع مشابه
Opaque Information, Deviation from Target Leverage and Speed of Adjustment
Information opacity leads to information asymmetry. In this situation, in providing their own financial needs, firms face limitations and inevitably provide their financial needs from the debt market by signalling private information to it. In addition, information opacity affects the leverage adjustment speed. This research investigates the effect of information opacity on deviation from targe...
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This study investigates whether deviation from target leverage (leverage adjustment speed) in firms with small positive earnings (i.e., SPOS) is higher (slower) than that of other firms. We find evidence suggesting that managers of SPOS manipulate sales, production processes, and discretionary expenses to avoid reporting losses. Our results show that deviation from target leverage in SPOS is hi...
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A number of prominent papers in the literature have estimated the speed of adjustment (SOA) of firms’ leverage ratios with estimators not designed for applications in which the dependent variable is a ratio. This made them detect mean reversion, which they mistakenly considered as readjustment. We propose a non-parametric way to model leverage ratios under the NULL, and a method of reconciling ...
متن کاملWhat Do Credit Markets Tell Us About the Speed of Leverage Adjustment?
T paper proposes a new methodology to infer investors’ expectations about the speed of leverage adjustment implicit in the prices of credit instruments. On average, the credit markets imply a fairly rapid annual speed of adjustment of 26% toward a firm’s predicted leverage. The speed varies considerably across partitions formed by the differential implications of the pecking order, market timin...
متن کاملFirm crash risk, information environment, and speed of leverage adjustment ¬リニ
Article history: Received 14 May 2013 Received in revised form 21 January 2015 Accepted 22 January 2015 Available online 30 January 2015 This paper examines the effect of a firm's crash-risk exposure on its speed of leverage adjustment (SOA), and how this effect is influenced by the information environment of the country in which the firm is located.We employ a panel of 19,247 firms across 41 c...
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ژورنال
عنوان ژورنال: Advances in economics, business and management research
سال: 2022
ISSN: ['2352-5428']
DOI: https://doi.org/10.2991/aebmr.k.220304.034