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Suppliers’ and customers’ information asymmetry and corporate bond yield spreads

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  • Chen, Tsung-Kang
  • Liao, Hsien-Hsing
  • Kuo, Hui-Ju
  • Hsieh, Yu-Ling

Abstract

This study investigates the information asymmetry effects of suppliers and customers on a firm’s bond yield spreads by employing American bond market data from 2001 to 2008. This study finds that both suppliers’ and customers’ information asymmetry effects significantly explain a firm’s bond yield spreads. Besides, the information asymmetry effects of more important suppliers and customers are more significant than those of less important ones. The results are robust even after controlling for other well-known firm specific and economic variables.

Suggested Citation

  • Chen, Tsung-Kang & Liao, Hsien-Hsing & Kuo, Hui-Ju & Hsieh, Yu-Ling, 2013. "Suppliers’ and customers’ information asymmetry and corporate bond yield spreads," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 3181-3191.
    • Handle: RePEc:eee:jbfina:v:37:y:2013:i:8:p:3181-3191
    DOI: 10.1016/j.jbankfin.2013.02.026
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    Cited by:

    1. Katarzyna Platt, 2020. "Corporate Bonds And Product Market Competition," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 43(3), pages 615-647, August.
    2. Gormus, Alper & Nazlioglu, Saban & Soytas, Ugur, 2018. "High-yield bond and energy markets," Energy Economics, Elsevier, vol. 69(C), pages 101-110.
    3. Chen, Long & Zhang, Gaiyan & Zhang, Weina, 2016. "Return predictability in the corporate bond market along the supply chain," Journal of Financial Markets, Elsevier, vol. 29(C), pages 66-86.

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    More about this item

    Keywords

    Suppliers’ and customers’ information asymmetry; Bond yield spreads; Supply chain;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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