Earticle

초록

영어

We examine whether good corporate governance plays a role in influencing a firm’s financing policy. Specifically, we hypothesize that firms with strong governance tend to prefer stocks over long-term debt. We argue that this is because strong governance reduces information asymmetry between providers of capital (equity investors) and users of capital (managers). While the reduction of information asymmetry has positive connotations for both equity and debt financing, we argue that there is a more significant effect on equity financing. Our test results are consistent with this prediction. We find that equity is preferred to debt financing in firms with high quality governance. This finding contradicts an alternative theory, the pecking order hypothesis, which suggests that firms will issue equity as their last resort. Our results suggest, instead, that strong governance can lower agency costs to a level where equity becomes more attractive to debt as a method of long-term financing.

목차

SUMMARY
 1. Introduction
 2. Literature Review and Hypotheses Development
 3. Research Design
  3.1. Sample
  3.2. Corporate Governance Measures
  3.3. Regression Model
 4. Empirical Results
  4.1. Univariate Tests
  4.2. Regression Results
  4.3. Small versus Large Firms
  4.4. Magnitude of Equity Issues
  4.5. Additional Analysis
 5. Conclusion
 REFERENCES
 TABLE

키워드

저자

• Vivek Mande [ White, Nelson Professor of Accounting California State University, Fullerton ]
• Young K. Park [ Professor of Finance Sungkyunkwan University ]
• Myungsoo Son [ Associate Professor of Accounting California State University, Fullerton ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330