Acess to the public debt market effect on corporate leverage : evidence from the US

• Autor(a) principal: Kostyunina, Maria
• Data de Publicação: 2016
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/21053
• topic: Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This study addresses the research question largely underestimated in the previous empirical works: how supply-side constrain factors influence firms’ financing opportunities and capital structure. In particular, it examines the effect of firms’ access to the public debt market estimated by the possession of a credit rating on firms’ leverage level. Findings show that after controlling for demand-side determinants of firms’ demand for debt, firms that have a credit rating are 1.8% up to 2.5% more levered than firms without a credit rating. Furthermore, this study’s findings suggest that the impact of firms having access to the public debt market – on firms’ leverage is time variant and is particularly sharp and significant during the years of economic downturn. During the economic crisis of the year 2000 and the most recent financial crisis of 2008 firms with a credit rating were up to 9 – 10% more levered than non-rated firms, at 1% significance level.