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Financial Pressure and Balance Sheet Adjustment by UK Firms Author info | Abstract | Publisher info | Download info | Related research | Statistics Andrew Benito () (Banco de España)
Garry Young () (Bank of England)
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This paper examines the financial policies and balance sheet adjustment of companies. Using a large panel of quoted UK firms, we estimate models for dividends, new equity issuance and investment, relating them to debt adjustment. The results suggest that while dividends are sticky in the short run, they are an important means of balance sheet adjustment in the long run. Other evidence supports the idea that companies actively target their balance sheet by variation in dividends, new equity issues and investment. There is evidence for financial pressure effects of debt-servicing costs on investment and dividends but not new equity issuance.
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Paper provided by Banco de España in its series Banco de España Working Papers with number
0209.
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Length: 39 pages
Date of creation: Apr 2002Date of revision:
Handle: RePEc:bde:wpaper:0209Contact details of provider: Email: Web page: http://www.bde.es/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (María D. González. Electronic Dissemination of Information Unit. Research Department. Banco de España).
Keywords: Financial pressure ; dividends ; equity issues ; debt ; investment ; company panel data ; Other versions of this item:
Find related papers by JEL classification: G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Albert Jaeger, 2003.
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Ignacio Hernando & Carmen Martínez-Carrascal, 2003.
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Banco de España Working Papers
0319, Banco de España.
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Andrew Benito, 2003.
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Banco de España Working Papers
0303, Banco de España.
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Andrew Benito & John Whitley, .
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Bank of England working papers
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Andrew Benito, 2002.
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von Kalckreuth, Ulf & Chirinko, Robert S. & Jörg Breitung, 2003.
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Discussion Paper Series 1: Economic Studies
2003,06, Deutsche Bundesbank, Research Centre.
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[Downloadable!]
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