Monetary policy and regional availability of debt financing

• 成果类型: Article
• 署名作者: Massa, Massimo; Zhang, Lei
• 署名单位: INSEAD Business School; Nanyang Technological University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2013.04.002
• 发表日期: 2013
• 页码: 439-458
• 关键词: Monetary policy; Debt inflexibility; financial constraints; capital structure; Cash flow sensitivity

摘要

The relative availability of bond and bank financing should affect the firm's external financing and investment decisions. We define a measure that proxies for the regional borrowing inflexibility to substitute between bank and bond financing: debt inflexibility. Debt inflexibility tilts the firm's financial structure towards equity and reduces investment. The impact is stronger during the period of tight monetary policy, particularly for smaller firms and firms without banking relationships. Debt inflexibility increases the sensitivity of cash holdings to cash flows, reduces the likelihood of dividend payment and makes the firm more likely to pay equity in mergers and acquisitions. (C) 2013 Elsevier B.V. All rights reserved.