Determinants of corporate borrowing: A behavioral perspective
نویسنده
چکیده
Article history: Received 22 December 2008 Received in revised 4 February 2009 Accepted 6 February 2009 Available online 20 February 2009 This article integrates an earnings-based capital structure model into a simple real options framework to analyze the effects of managerial optimism and overconfidence on the interaction between financing and investment decisions. Several empirical implications follow from solving the model. Notably, my analysis reveals that managerial traits can ameliorate bondholder–shareholder conflicts, such as the debt overhang problem. While debt delays investment inefficiently, mildly biased managers can overcome this problem, even though they tend to issue more debt. Similar properties and results are discussed for other real options, such as the asset stripping or risk-shifting problems. © 2009 Elsevier B.V. All rights reserved. JEL classifications: G13 G31 G32 G33
منابع مشابه
A Corporate Perspective on Effect of Asymmetric Verifiability on Investors’ Expectation Differences
Investigating the performance of companies is one of the most important issues for the users of accounting information. The purpose of this study was to provide evidence about the effect of asymmetric appropriateness on investors' expectations. The results of the research on accepted companies In the Tehran Stock Exchange during the period from 2012 to 2016. To collect data, a library method wa...
متن کاملAnatomy of Corporate Borrowing Constraints∗
A common perspective in macro-finance analyses links firms’ borrowing constraints to the liquidation value of physical assets firms pledge as collateral. We empirically investigate borrowing by non-financial firms in the US. We find that 20% of corporate debt by value is collateralized by specific physical assets (“asset-based lending” in creditor parlance), while 80% is based predominantly on ...
متن کاملTowards Critical Analysis of the Political Determinants of Health; Comment on “How Neoliberalism Is Shaping the Supply of Unhealthy Commodities and What This Means for NCD Prevention”
The recent perspective article “How Neoliberalism Is Shaping the Supply of Unhealthy Commodities and What This Means for NCD Prevention,” by Lencucha and Throw, interrogates how the dominant neoliberal paradigm restricts meaningful policy action to prevent non-communicable diseases (NCDs). It contributes an NCD perspective to the existing literature on neoliberalism and...
متن کاملA Perspective on Promoter Ownership and Market Reaction to Corporate News: Evidence from India
C orporate governance structures in the wake of observed differences in firm ownership structures in developed markets and emerging market economies are distinct. In this paper, we examine the effect of an ownership structure of firms on the market reaction to corporate news flows in the context of emerging market economies like India. We observe the price and volume movements associ...
متن کامل