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「International Review of Finance」/No.11-2

論文名

Capital Market Access and Financing of Private Firms*

執筆者名

Vidhan K. Goyal/Alessandro Nova/Laura Zanetti

詳 細  
No,1/2011-06
開始ページ:p155
終了ページ:p179

Capital Market Access and Financing of Private Firms*
Vidhan K. Goyal(Department of Finance, Hong Kong University of Science and Technology)
Alessandro Nova(Department of Finance, Hong Kong University of Science and Technology)
Laura Zanetti(Universit? Bocconi)

How does capital market access affect the capital structure decisions of firms? To examine this question, we compare the financing decisions of a large sample of private and public companies from 18 different European countries. We find significant differences in the leverage policies of private and public firms. Private firms have much higher leverage ratios than public firms. In particular, the leverage of private firms is more negatively related to past profitability, consistent with their less active adjustment. Other evidence corroborates sluggish adjustment and suggests that private firms face significantly higher cost of accessing external capital markets. When we compare private and public firms in countries that differ on creditor rights and contract enforceability, we find more pronounced differences in the leverage policies of private and public firms in countries that are strong on legal rights and their enforcement. In countries with weak rights and poor enforcement, the financing policies of public firms begin to resemble those of private firms.

*We thank Sudipto Dasgupta and Murray Frank for many helpful comments and discussions. Vidhan Goyal thanks the Research Grants Council of the Hong Kong Special Administrative Region for financial support (Project No. 641608).

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論文名

Heterogeneity in the Speed of Adjustment toward Target Leverage*

執筆者名

Ralf Elsas/David Florysiak

詳 細  
No,2/2011-06
開始ページ:p181
終了ページ:p211

Heterogeneity in the Speed of Adjustment toward Target Leverage*
Ralf Elsas(Institute for Finance & Banking, University of Munich)
David Florysiak(Institute for Finance & Banking, University of Munich)

Estimating the speed of adjustment toward target leverage using the standard partial adjustment model assumes that all firms within the sample adjust at the same (average) pace. Dynamic capital structure theory predicts heterogeneity in adjustment speed due to firm-specific adjustment costs. Applying an estimator designed to be unbiased in the context of unbalanced dynamic panel data with a fractional dependent variable (DPF estimator), we conduct an extensive analysis of cross-sectional heterogeneity in the speed of adjustment of firms. We find evidence for pronounced heterogeneity, where speed of adjustment is the highest for firms with high default risk or expected bankruptcy costs, and if opportunity costs of deviating from a target are high. Our evidence is consistent with the general relevance of the trade-off theory.

*We thank Sudipto Dasgupta for many insightful comments. All errors are our responsibility.

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論文名

Capital Structure: New Evidence from the Ownership Structure*

執筆者名

Julio Pindado/Chabela De La Torre

詳 細  
No,3/2011-06
開始ページ:p213
終了ページ:p226

Capital Structure: New Evidence from the Ownership Structure*
Julio Pindado(Dpt. Administracion y Economia de la Empresa, Universidad de Salamanca)
Chabela De La Torre(Dpt. Administracion y Economia de la Empresa, Universidad de Salamanca)

This paper identifies jointly the optimal investment trigger and the optimal financing package for a corporate expansion project, using a real-option ‘trade-off’ model with agency problems. It also identifies the optimal initial capital structure of the firm (before the expansion). We show that it is generally optimal to use more debt than equity to finance the expansion. The other results are as follows: (i) existing debt has a negative effect, while the debt component of expansion financing has a positive effect, on investment; (ii) the debt component of the optimal expansion financing package is a decreasing function of the pre-expansion leverage ratio (consistent with mean reverting leverage ratios), and is also decreasing in the magnitude of the expansion opportunity; and (iii) the optimal pre-expansion leverage ratio is a decreasing function of both the firm’s profitability and the magnitude of the growth opportunity. These relationships are generally consistent with empirical evidence, and help reconcile the trade-off theory of capital structure with apparently contradictory empirical evidence.

*I would like to acknowledge financial support from the Social Science and Humanities Research Council of Canada.

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論文名

Is the Negative Relation Between Leverage and Historical Market-To-Book Specific to US and Information and Communication Technology Firms?*

執筆者名

W. Allard Bruinshoofd/Leo De Haan

詳 細  
No,4/2011-06
開始ページ:p227
終了ページ:p243

Is the Negative Relation Between Leverage and Historical Market-To-Book Specific to US and Information and Communication Technology Firms?*
W. Allard Bruinshoofd(Rabobank)
Leo De Haan(De Nederlandsche Bank)

This paper examines the relationship between corporate capital structures and historical market-to-book ratios using panel data for US, UK, and continental European firms for the period 1991–2001. We confirm the negative effect on leverage found for the United States, but find that this effect is weak for the United Kingdom and continental Europe and moreover specific to information and communication technology (ICT) firms and the ICT boom episode in continental Europe.

*We gratefully acknowledge useful comments of Jan Marc Berk, Jaap Bos, Tijs de Bie, Peter van Els, Jakob de Haan, Jim Kolari, Clemens Kool, participants of the 60th International Atlantic Economic Conference (New York), the 34th Eurobanking Conference (Dubrovnik), the 2007 Erasmus Finance Day (Rotterdam), seminars at ABN-Amrobank, Free University, De Nederlandsche Bank, and Rabobank, as well as an anonymous referee.

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論文名

The Degree of Judicial Enforcement and Credit Markets: Evidence from Japanese Household Panel Data*

執筆者名

Charles Yuji Horioka/Shizuka Sekita

詳 細  
No,5/2011-06
開始ページ:p245
終了ページ:p268

The Degree of Judicial Enforcement and Credit Markets: Evidence from Japanese Household Panel Data*
Charles Yuji Horioka(Institute of Social and Economic Research, Osaka University)
Shizuka Sekita(Department of Economics, Kyoto Sangyo University)

The length of trials in Japan has become shorter over time. Theory predicts that better judicial enforcement (i.e., faster court proceedings) will decrease the probability of being credit rationed, increase loan size, and increase the probability of bankruptcy. Our estimation results based on micro data from a panel survey of consumers in conjunction with judicial data by court district show that better judicial enforcement increases the probability of being rationed in some cases and decreases loan size (contrary to expectation) but increases the probability of bankruptcy (as expected). Thus, better judicial enforcement facilitates the recovery of loans but may be socially harmful.

*We would like to thank David Blau, Lucia Dunn, Shinya Kajitani, Mari Kan, Wataru Kureishi, Howard P. Marvel, Masao Ogaki, Tae Okada, Hiroko Okudaira, Keiko Tamada, Midori Wakabayashi, Bruce Weinberg, Keiko Yoshida, and all members of Groupe d’Analyse et de Théorie Economique (GATE), Lyon, France, for their useful advice and suggestions. Moreover, we greatly appreciate detailed comments provided by an anonymous referee of this journal, Alberto Zazzaro, Colin R. McKenzie, and Kei Sakata, which enabled us to significantly improve our paper. In addition, we would like to thank the Institute for Research on Household Economics for providing micro-data from the Japanese Panel Survey of Consumers for the 2003–2007 period. This paper was prepared while the second author, Shizuka Sekita, was visiting GATE. The first author is grateful to the Ministry of Education, Culture, Sports, Science, and Technology of the Japanese Government for Grant-in-Aid for Scientific Research Category B (topic number 18330068) and Category S (topic number 20223004) and to the Global Center of Excellence (GCOE) Program of the Graduate School of Economics and the Institute of Social and Economic Research of Osaka University, all of which supported this research. Any remaining errors are our own.

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