This paper shows that asymmetric information about the timing of earnings can affect corporate capital structure. It sheds some new light on two following questions: why may profitable firms be interested in issuing equity, and why does debt not necessarily signal a firm quality. These issues...

This paper helps to explain the dividend patterns of large corporations by presenting a dynamic model where payout based incentives simultaneously mitigate opportunistic actions (perquisites) and induce managers to convey inside information to the market. Incentive compatibility links the...

The author specifies the pivotal role of accounting information quality in moderating the influence of dividends on the investment decisions of listed firms in Vietnam from 2009 to 2020. In this study, the significant dependence of investment on dividends is proved by the Two-Step System...

This paper examines a class of signaling games with multi-dimensional private information to study how the prior, joint distribution of the private information variables affect a signal's effectiveness in revealing information about these variables. To illustrate the general problem investigated...

We study how signaling affects equilibrium outcomes and welfare in markets with adverse selection. Using data from an online credit market, we estimate a model of borrowers and lenders where low reserve interest rates can signal low default risk. Comparing a market with and without signaling...

We analyse a Kyle-type continuous-time market model in which liquidity trading is correlated with a noisy public signal that is released continuously. We show that, in contrast to the previous literature, Kyle's lambda, the price sensitivity to the order flow, can even be nonmonotonic, depending...

The signaling hypothesis suggests that firms have incentives to underprice their initial public offerings (IPOs) to signal their quality to the outside investors and to issue seasoned equity (SEO) at more favorable terms. While the initial empirical evidence on the signaling hypothesis was weak,...

This paper contributes new evidence on market pricing of rating changes. We examine the relation between spreads and ratings for a very large and comprehensive sample of corporate bonds, which allows us to test for country- and industry-specific effects, as well as to explore the differences...

The signaling hypothesis suggests that firms have incentives to underprice their initial public offerings (IPOs) to signal their quality to the outside investors and to issue seasoned equity (SEO) at more favorable terms. While the initial empirical evidence on the signaling hypothesis was weak,...