Debt Market timing: Evidence from Bank-based Systems
AbstractSeveral studies make evidence that market timing becomes the factor that shapes financing policies. However, debt market timing still less developed compared to equity market timing. This paper investigates the relevance of market timing considerations on the debt issuance using a panel of 30 Tunisian listed firms and 100 French firms of the stock market index SBF 120. Consistent with the market timing theory, we find that firms tend to issue debt when interest rate are low and are less likely to take debt issuance decisions when they perceive equity market conditions as more favorable. This evidence suggests that borrowing policies are shaped by market timing considerations.
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Bibliographic InfoArticle provided by ASERS Publishing in its journal Journal of Advanced Studies in Finance.
Volume (Year): I (2010)
Issue (Month): 2 (December)
Pages: 144 - 151
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Web page: http://www.asers.eu/journals/jasf.html
capital structure; debt market timing; interest rate; market conditions; panel data;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
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