Investment-based financing constraints and debt renegotiation

被引:26
|
作者
Shibata, Takashi [1 ]
Nishihara, Michi [2 ,3 ]
机构
[1] Tokyo Metropolitan Univ, Grad Sch Social Sci, Hachioji, Tokyo 1920397, Japan
[2] Osaka Univ, Grad Sch Econ, Toyonaka, Osaka 5600043, Japan
[3] Ecole Polytech Fed Lausanne, Swiss Finance Inst, CH-1015 Lausanne, Switzerland
关键词
Real option; Credit constraints; Strategic debt service; Capital structure; CAPITAL STRUCTURE; CORPORATE-DEBT; REORGANIZATION; OWNERSHIP; SERVICE; COSTS; RISK;
D O I
10.1016/j.jbankfin.2014.11.005
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We consider how equity holders' bargaining power during financial distress influences the interactions between financing and investment decisions when the firm faces the upper limit of debt issuance. We obtain four results. First, weaker equity holders' bargaining power is more likely that the firm is financially constrained. Second, the investment quantity is independent of equity holders' bargaining power. Third, the constrained credit spreads are increasing with equity holders' bargaining power, contrary to the unconstrained ones. Fourth, higher volatility and weaker equity holders' bargaining power are likely that the firm prefers to issue debt with renegotiation, compared with debt without renegotiation. (C) 2014 Elsevier B.V. All rights reserved.
引用
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页码:79 / 92
页数:14
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