Analyst coverage and financing decisions

Chang, Xin, Dasgupta, Sudipto and Hilary, Gilles 2006, Analyst coverage and financing decisions, The journal of finance, vol. 61, no. 6, pp. 3009-3048, doi: 10.1111/j.1540-6261.2006.01010.x.

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Title Analyst coverage and financing decisions
Author(s) Chang, Xin
Dasgupta, Sudipto
Hilary, Gilles
Journal name The journal of finance
Volume number 61
Issue number 6
Start page 3009
End page 3048
Total pages 40
Publisher Wiley
Place of publication London, Eng.
Publication date 2006-12
ISSN 0022-1082
Summary We provide evidence that analyst coverage affects security issuance. First, firms covered by fewer analysts are less likely to issue equity as opposed to debt. They issue equity less frequently, but when they do so, it is in larger amounts. Moreover, these firms depend more on favorable market conditions for their equity issuance decisions. Finally, debt ratios of less covered firms are more affected by Baker and Wurgler’s(2002) “external finance-weighted” average market-to-book ratio. These results are consistent with market timing behavior associated with information asymmetry, as well as behavior implied by dynamic adverse selection models of equity issuance.
Language eng
DOI 10.1111/j.1540-6261.2006.01010.x
Field of Research 150205 Investment and Risk Management
1502 Banking, Finance And Investment
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2006, Wiley
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Document type: Journal Article
Collection: Department of Finance
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