菜单总览
— 招生活动 —

Index Membership and Capital Structure: International Evidence

  • 2017.11.27 20:20:20
  • 招生活动
Speaker: Vidhan Goyal, Hong Kong University of Science and Technology

Topic:

Index Membership and Capital Structure: International Evidence

 

Time & Date:

10:30am-12:00pm, 2017/11/28

Venue:

Room 502, Daoyuan Building, CUHK(SZ)

Speaker:

Vidhan Goyal, Hong Kong University of Science and Technology

Detail:

How much do shocks to the information environment in equity markets matter
for debt supply and the financing of firms? We find that the use of debt increases
by about two to three percentage points following exogenous additions of stocks to
an index. The leverage response is primarily in public debt markets: Borrowing
costs in these markets decrease, while bond liquidity increases. These results suggest
that index additions affect leverage because an increase in public information
reduces information asymmetries for lenders and increases their willingness to buy
information-sensitive debt. Indeed, stocks added to an index are followed by more
equity analysts. Overall, we support the view that information production in equity
markets spills over into debt markets. 
  •