Analyst coverage and financing decisions

• 成果类型: Article
• 署名作者: Chang, Xin; Dasgupta, Sudipto; Hilary, Gilles
• 署名单位: University of Melbourne; Hong Kong University of Science & Technology; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2006.01010.x
• 发表日期: 2006
• 页码: 3009-3048
• 关键词: LONG-RUN PERFORMANCE; operating performance; earnings management; EQUITY ISSUES; INVESTMENT; FIRMS; INFORMATION; forecasts

摘要

We provide evidence that analyst coverage affects security issuance. First, firms covered by fewer analysts are less likely to issue equity as opposed to debt. They issue equity less frequently, but when they do so, it is in larger amounts. Moreover, these firms depend more on favorable market conditions for their equity issuance decisions. Finally, debt ratios of less covered firms are more affected by Baker and Wurgler's (2002) external finance-weighted average market-to-book ratio. These results are consistent with market timing behavior associated with information asymmetry, as well as behavior implied by dynamic adverse selection models of equity issuance.