表題番号：2018K-185
日付：2022/06/01
研究課題An examination of impacts of stock liquidity on firms'investment inefficiency through the channels of incomplete contracting and information asymmetry
| 研究者所属（当時） | 資格 | 氏名 | |
|---|---|---|---|
| （代表者） | 商学学術院 大学院経営管理研究科 | 准教授 | チェン ミンヤン ウィリアム |
- 研究成果概要
- We documents that enhanced stock liquidity increases the propensity of firms to raise debt capital. The positive effect of liquidity on a debt issuance propensity is much stronger in firms with greater de fault risk. The reduction of the cost of debt capital driven by enhanced liquidity is much more significant than the reduction of the cost of equity capital. To address endogeneity concerns, we consider several tick-size changes in the United States, obtaining highly consistent results. These results are consistent with standard theoretical frameworks for financing under uncertainty and asymmetric information: by facilitating information production, stock liquidity reduces insider and market uncertainty about future firm cash flows, thereby lowering the default risk and thus the costs of debt financing. We also provide further evidence showing that enhanced liquidity reduces common uncertainty more significantly than the information gap.