Distracted institutional shareholders and debt maturity

Author:

Cheung Adrian (Wai Kong)1ORCID,Khoo Joye2ORCID,Wang Rui3ORCID

Affiliation:

1. Faculty of Finance City University of Macau Macao

2. School of Accounting, Economics and Finance Curtin University Australia

3. Department of Accountancy Lingnan University Hong Kong

Abstract

AbstractWe examine whether institutional shareholders’ distraction affects corporate debt maturity decisions. We find that firms with distracted shareholders are associated with lengthened debt maturity. The effect becomes stronger for firms with high information asymmetry or those with high levels of financial constraint. When distraction is high and debt maturity is low, firms hold more cash and use that cash in value‐destroying acquisitions. This supports the prevalence of agency problems when institutional shareholders are distracted. The impact of distraction is persistent and affects the debt maturity decision in the future. Our findings are robust to endogeneity and other concerns.

Publisher

Wiley

Reference97 articles.

1. Corporate equity ownership, strategic alliances, and product market relationships;Allen J. W.;The Journal of Finance,2000

2. Corporate debt maturity and the real effects of the 2007 credit crisis;Almeida H.;Critical Finance Review,2012

3. The cash flow sensitivity of cash;Almeida H.;The Journal of Finance,2004

4. Altman E. I.(1977). The Z‐score bankruptcy model : past present and future.Financial crises : institutions and markets in a fragile environment 89–108.

5. The role of information and financial reporting in corporate governance and debt contracting;Armstrong C. S.;Journal of Accounting and Economics,2010

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3