Showing 1 - 10 of 2,074
Persistent link: https://www.econbiz.de/10013002918
When larger market values of equity result in being subject to costly regulation, firms have incentives to shift their sources of financing toward debt and away from equity. We use the Sarbanes-Oxley Act of 2002 (SOX) as a setting to provide evidence of such incentives. Smaller firms were...
Persistent link: https://www.econbiz.de/10012855940
When larger market values of equity result in being subject to costly regulation, firms have incentives to shift their sources of financing toward debt and away from equity. We use the Sarbanes-Oxley Act of 2002 (SOX) as a setting to provide evidence of such incentives. Smaller firms were...
Persistent link: https://www.econbiz.de/10012867859
The option to file a lawsuit against an entrepreneur encourages shareholders to fund projects and to retain entrepreneurs. An entrepreneur, at risk of a lawsuit filing, may save cash as a precautionary measure. When cash accumulates and a lawsuit filing does not occur, an entrepreneur increases...
Persistent link: https://www.econbiz.de/10012968647
I empirically show that the time delay firms face in raising outside capital affects cash holdings. I exploit the 2005 Securities Offering Reform (the Reform) as a quasi-natural experiment. For a subset of large public US firms, the Reform relaxed the requirement to undergo the standard review...
Persistent link: https://www.econbiz.de/10013118724
The Sarbanes-Oxley Act (SOX) is an exogenous shock to the information environment of firms listed in the U.S. Thus, firms might adjust their capital structures to reflect the new information environment. I examine SOX's effect on capital structure. Since SOX applies only to firms listed in the...
Persistent link: https://www.econbiz.de/10013133059
Persistent link: https://www.econbiz.de/10013141012
In this paper, we ask how firms’ optimal debt structure responds to a change in the bankruptcy regime. While existing work shows that this relationship is dependent on the ex-ante liquidation value of a firm, we demonstrate that the ownership of lenders they are connected to also matters. We...
Persistent link: https://www.econbiz.de/10013301190
Using limitations to the deductibility of interest payments triggered by the introduction of interest ceiling rules globally, we show that affected private firms reduce leverage relative to unaffected firms. In support of a causal effect of taxes on corporate capital structure choices, we show...
Persistent link: https://www.econbiz.de/10015398137
We exploit the staggered adoption of the universal demand (UD) laws across U.S. states, which impedes shareholder rights to initiate derivative lawsuits, as a quasi-natural experiment to examine the relation between shareholder litigation rights and firm capital structures. We find that weaker...
Persistent link: https://www.econbiz.de/10012851618