The firm information environment and capital structure: international evidence
This article investigates the effect of the firm information environment, characterized by the analyst characteristics, on firms' capital structure choices and whether this effect varies according to country-level institutional environments. Using a comprehensive international data set that cov...
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| Veröffentlicht in: | Applied economics 2017-09, Vol.49 (44), p.4482-4500 |
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| container_title | Applied economics |
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| creator | Dang, Tung Lam Huynh, Thi Hong Hanh Nguyen, Manh Toan Nguyen, Thi Minh Hue |
| description | This article investigates the effect of the firm information environment, characterized by the analyst characteristics, on firms' capital structure choices and whether this effect varies according to country-level institutional environments. Using a comprehensive international data set that covers 19 939 firms across 41 countries between 2000 and 2010, we document two key findings. First, firms with lower analyst coverage, higher forecast dispersion and higher forecast errors have higher leverage. Second, the effect of the firm information environment on corporate leverage is attenuated in countries with stronger governance mechanism and better information transparency. This result suggests that a firm's information environment is an important factor influencing its capital structure decision and that country-level institutional environments matter to this effect. |
| doi_str_mv | 10.1080/00036846.2017.1284991 |
| format | Article |
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| ispartof | Applied economics, 2017-09, Vol.49 (44), p.4482-4500 |
| issn | 0003-6846 1466-4283 |
| language | eng |
| recordid | cdi_proquest_journals_2010955049 |
| source | EBSCOhost Business Source Complete |
| subjects | analyst characteristics Analysts Capital structure Companies Earnings forecasting Economic analysis Economic theory Firm information environment Governance Information institutional environments Leverage Transparency |
| title | The firm information environment and capital structure: international evidence |
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