Target Behavior and Financing: How Conclusive Is the Evidence?

• 成果类型: Article
• 署名作者: Chang, Xin; Dasgupta, Sudipto
• 署名单位: Nanyang Technological University; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2009.01479.x
• 发表日期: 2009
• 页码: 1767-1796
• 关键词: capital structure; leverage; CHOICE; debt

摘要

The notion that firms have a debt ratio target that is a primary determinant of financing behavior is influential in finance. Yet, how definitive is the evidence ? We address this issue by generating samples where financing is unrelated to a firm's current debt ratio or a target. We find that much of the available evidence in favor of target behavior based on leverage ratio changes can be reproduced for these samples. Taken together, our findings suggest that a number of existing tests of target behavior have no power to reject alternatives.