Corporate Investment and Financing under Asymmetric Information

Détails

ID Serval
serval:BIB_6448B812632E
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Corporate Investment and Financing under Asymmetric Information
Périodique
Journal of Financial Economics
Auteur(s)
Morellec  E., Schuerhoff  N.
ISSN
0304-405X
Statut éditorial
Publié
Date de publication
02/2011
Peer-reviewed
Oui
Volume
99
Numéro
2
Pages
262-288
Langue
anglais
Résumé
We develop a dynamic model of corporate investment and financing decisions in which corporate insiders have superior information about the firm's growth prospects. We show that firms with positive private information can credibly signal their type to outside investors using the timing of corporate actions and their debt-equity mix. Using this result, we show that asymmetric information induces firms with good prospects to speed up investment, leading to a significant erosion of the option value of waiting to invest. Additionally, we demonstrate that informational asymmetries may not translate into a financing hierarchy or pecking order over securities. Finally, we generate a rich set of testable implications relating firms' investment and financing strategies, abnormal announcement returns, and external financing costs to a number of managerial, firm, and industry characteristics.
Mots-clé
Asymmetric information, Financing decisions, Endogenous financing constraints, Corporate investment, Real options
Web of science
Création de la notice
31/05/2010 16:23
Dernière modification de la notice
21/08/2019 6:14
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