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How can we improve inferences from surveys? A new look at the convertible debt questions from the Graham and Harvey survey data

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  • Dong, Ming
  • Dutordoir, Marie
  • Veld, Chris

Abstract

We revisit the survey questions on convertible bond issue motives from the influential study of Graham and Harvey (2001). Our question-conditional analysis connecting survey answers with firm characteristics reveals that the conclusions on two of the four convertible debt theories from the original study need to be revised. More particularly, the delayed equity rationale and the sequential financing rationale on convertible bond issuance do not receive support from the question-conditional tests. Our results indicate that adding a question-conditional analysis is essential in obtaining correct inferences from survey data.

Suggested Citation

  • Dong, Ming & Dutordoir, Marie & Veld, Chris, 2019. "How can we improve inferences from surveys? A new look at the convertible debt questions from the Graham and Harvey survey data," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 61(C), pages 213-222.
    • Handle: RePEc:eee:intfin:v:61:y:2019:i:c:p:213-222
    DOI: 10.1016/j.intfin.2019.03.002
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    Cited by:

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    2. Burlacu, Radu & Jimenez-Garcès, Sonia, 2022. "Why do firms issue callable convertible bonds? A critique of the “backdoor equity financing” theory," Journal of Banking & Finance, Elsevier, vol. 144(C).

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    More about this item

    Keywords

    Convertible debt; Survey and questionnaire research; Question-conditional analysis; Interviews; Large-sample analysis;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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