The Cyclical Behavior of Debt and Equity Finance
Debt and equity issuance are procyclical for most size-sorted firm categories of listed US firms and the procyclicality of equity issuance decreases monotonically with firm size. At the aggregate level, however, the results for equity issuance are not conclusive due to different behavior of the largest firms, especially those in the top one percent. During a deterioration in economic conditions, firms limit the impact of the reduction in external financing on investment by shedding financial assets. This is true for a worsening in aggregate as well as firm-specific conditions. (JEL E32, G32, L11, L25)
Year of publication: |
2011
|
---|---|
Authors: | Covas, Francisco ; Haan, Wouter J. Den |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 101.2011, 2, p. 877-99
|
Publisher: |
American Economic Association - AEA |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The Role of Debt and Equity Finance Over the Business Cycle
Covas, Francisco, (2012)
-
Cyclical behavior of debt and equity using a panel of Canadian firms
Covas, Francisco, (2007)
-
The Role of Debt and Equity Finance over the Business Cycle
Covas, Francisco, (2006)
- More ...