The signaling role of covenants and the speed of capital structure adjustment under poor creditor rights: Evidence from domestically and cross-listed firms in Brazil

被引：0

作者：

Albanez, Tatiana ^{[1
]}

Schiozer, Rafael ^{[2
]}

机构：

[1] Sch Econ Business & Accounting FEA USP, Sao Paulo, Brazil

[2] Sao Paulo Sch Business Adm FGV EAESP, Sao Paulo, Brazil

来源：

JOURNAL OF MULTINATIONAL FINANCIAL MANAGEMENT | 2022年 / 63卷

基金：

巴西圣保罗研究基金会;

关键词：

Optimal capital structure; Creditor rights; Cross-listing; Institutional environment; Speed of adjustment; Adjustment costs; Waivers; CORPORATE GOVERNANCE; INFORMATION ENVIRONMENT; DEBT; DETERMINANTS; LEVERAGE; COST; RISK;

D O I：

10.1016/j.mulfin.2021.100704

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

This paper studies how covenants affect the speed of capital structure adjustment in Brazil, an environment with poor creditor rights. Unlike previous evidence for developed countries, we find that the existence of debt covenants increases the speed of capital structure adjustment by more than 20% for firms that are only domestically listed. For firms that are cross-listed in the US, this effect is smaller (if any), possibly because these firms "bond" to the stricter regulation and creditor protection of the US market. Our results suggest that in emerging markets with poor creditor protection, covenants are an imperfect substitute for strong creditor rights and employed as a signaling device, permitting firms to adjust their leverage towards optimal levels quicker.

引用

页数：16

共 17 条

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[16] Do stronger creditors' rights and an efficient bankruptcy process affect the speed of adjustment to target capital structure? Evidence from a quasi-natural experiment
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[17] To examine the role of climate risk exposure in corporate capital structure decisions, we use a large sample of firms across 35 countries from 2001 to 2021 and show a significantly positive association between firms' climate risk exposure and speed of leverage adjustment based on a two-step partial leverage adjustment model. A one- standard-deviation increase in climate risk exposure increases firms' SOA by 5.59%. A plausible explanation is that climate risk exposure mitigates agency conflicts and improves information efficiency. The positive rela- tionship is stronger in firms from countries with better climate governance, lower bank financing support, and higher policy quality. Overall, our study demonstrates the critical role of climate risk in capital structure de- cisions in the global context.
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