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Do Firms Care Who Provides their Financing?

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Author Info
Jeffrey K. MacKie-Mason

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Abstract

Several types of evidence are presented to demonstrate that firms are concerned with who provides their financing, not just with the debt/equity distinction. Aggregate and industry trends and patterns in the incremental sources of financial capital are documented, and a large sample of incremental corporate financial decisions is econometrically analyzed. There are large and persistent differences in the patterns of internal and external financing, both in the aggregate and across industries. Individual firms are shown to have distinct preferences for different providers of funds. Several indicators of potentially costly hidden information problems are important and significant determinants of choices between private and publicly-marketed sources, even after controlling for the type of security (debt or equity).

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3039.

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Date of creation: Jul 1989
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Handle: RePEc:nbr:nberwo:3039

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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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    Other versions:
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(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.)

  1. Sangkyun Park, 1994. "The bank capital requirement and information asymmetry," Working Papers 1994-005, Federal Reserve Bank of St. Louis. [Downloadable!]
  2. Reint Gropp, 2002. "Local Taxes and Capital Structure Choice," International Tax and Public Finance, Springer, vol. 9(1), pages 51-71, January. [Downloadable!] (restricted)
  3. Ayako Yasuda, 2001. "Institutions, Relationships and Bank Competition in Bond Underwriting Markets: An International Comparative Study," Center for Financial Institutions Working Papers 01-31, Wharton School Center for Financial Institutions, University of Pennsylvania. [Downloadable!]
  4. Miguel Cantillo and Julian Wright., 2000. "How Do Firms Choose Their Lenders? An Empirical Investigation," Research Program in Finance Working Papers RPF-256-Rev, University of California at Berkeley. [Downloadable!]
    Other versions:
  5. Vivek Ghosal & Prakash Loungani, 1996. "Firm size and the impact of profit-margin uncertainty on investment: do financing constraints play a role?," International Finance Discussion Papers 557, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  7. Ignacio Munyo, 2004. "The Determinants of Capital Structure: Evidence from an Economy without Stock Market," Econometric Society 2004 Latin American Meetings 267, Econometric Society. [Downloadable!]
  8. Takeo Hoshi & Anil Kashyap & David Scharfstein, 1993. "The Choice Between Public and Private Debt: An Analysis of Post-Deregulation Corporate Financing in Japan," NBER Working Papers 4421, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Mark L. Gertler & R. Glenn Hubbard, 1990. "Taxation, Corporate Capital Structure, and Financial Distress," NBER Working Papers 3202, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  10. Armando Gomes & Gordon Phillips, 2005. "Why Do Public Firms Issue Private and Public Securities?," NBER Working Papers 11294, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Tuomas A. Peltonen & Ricardo M. Sousa & Isabel S. Vansteenkiste, 2009. "Fundamentals, Financial Factors and The Dynamics of Investment in Emerging Markets," NIPE Working Papers 19/2009, NIPE - Universidade do Minho. [Downloadable!]
  12. Mark Carey & Mitch Post & Steven A. Sharpe, 1996. "Does corporate lending by banks and finance companies differ? Evidence on specialization in private debt contracting," Finance and Economics Discussion Series 96-25, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
    Other versions:
  13. Roger H. Gordon & Jeffrey K. MacKie-Mason, 1990. "Effects of the Tax Reform Act of 1986 on Corporate Financial Policy and Organizational Form," NBER Working Papers 3222, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    Other versions:
  15. Tobias Miarka & Michael Tröge, 2005. "Do bank-firm relationships reduce bank debt? Evidence from Japan," European Journal of Finance, Taylor and Francis Journals, vol. 11(1), pages 75-92, February. [Downloadable!] (restricted)
  16. Tuomas A. Peltonen & Ricardo M. Sousa & Isabel S. Vansteenkiste, 2009. "Asset prices, Credit and Investment in Emerging Markets," NIPE Working Papers 18/2009, NIPE - Universidade do Minho. [Downloadable!]
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