Information asymmetry and firms' credit market access: Evidence from Moody's credit rating format refinement

• 成果类型: Article
• 署名作者: Tang, Tony T.
• 署名单位: Barclays
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.07.007
• 发表日期: 2009
• 页码: 325-351
• 关键词: Information asymmetry; capital structure; FINANCING DECISIONS; investment policies; Credit ratings

摘要

I exploit Moody's 1982 credit rating refinement to examine its effects on firms' credit market access, financing decisions, and investment policies. While firms' ex ante yield spread can partially predict the direction of refinement changes, firms with refinement upgrades experience an additional decrease in their ex post borrowing cost compared with firms with downgrades. The former subsequently also issue more debt and rely more on debt financing over equity than the latter. Lastly, upgraded firms have more capital investments, less cash accumulation, and faster asset growth than downgraded firms. These findings show that credit market information asymmetry significantly affects firms' real outcomes. (C) 2009 Elsevier B.V. All rights reserved.