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This study examines financing behavior during financial crises in an international sample of corporate firms including 85 countries from 1987 to 2017. Measuring “financial cyclicality” as the difference between financing levels during normal times and financial crisis times, we document...
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Political environment is an important determinant of financial intermediation costs, which eventually affects the external financing patterns of firms. Political gyrations create policy uncertainty, which increases the information risk, weakens the investor demand, and reduces the offer size....
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Given the increasing importance of private equity in the world economy, we examine the strategic decision to finance a business in an international context by evaluating whether private equity is a substitute for or a complement to other sources of external finance. We find strong evidence that...
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We document the effect on leverage of a company's working-capital. Working-capital significantly affects a firm's credit ratings and security issuances, as well as influencing its leverage. Payables crowd out debt. Higher receivables and inventories are associated with higher leverage,...
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We find that equity mispricing impacts the speed at which firms adjust to their target leverage and does so in predictable ways depending on whether the firm is over- or underlevered. For example, firms that are above their target leverage and should therefore issue equity (or retire debt),...
Persistent link: https://www.econbiz.de/10013130668