Credit market conditions and the impact of access to the public debt market on corporate leverage

Judge, Amrit; Korzhenitskaya, Anna

doi:10.1016/j.irfa.2012.09.003

Cited by 19 publications

(12 citation statements)

References 28 publications

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“…These are total assets (TOT.AST), asset tangibility (TANGIB), market-to-book (M&B), RISK (cash flow volatility), and RETN (equity return) which have the correlation values of 0.213, 0.2143, -0.2725, 0.2189, and -0.3431respectively. Thus, the relationship between total assets, asset tangibility and risk are positively correlated with significant level of 0.052 (<1%), 0.0503(5%), and 0.0454(<5%).These findings reflect prior bond access literatures that found strong correlations between leverage and firm size (measured by total asset), asset tangibility, and risk to be positively correlated with these three variables (Judge and Korzhenitskaya, 2012).…”

Section: Total Firm Samplesupporting

confidence: 76%

“…The variables represent the firm characteristics of rated and non-rated firms that the capital structure theories predict to have an impact on firm's leverage. In this study, the researcher follows the existing literature in choices of the independent variables Leary;2009;Mittoo and Zhang, 2010;Judge and Korzhenitskaya, 2012). These characteristics include total assets (size), asset tangibility ratio, market-to-book ratio, R&D expenditure ratio, risk (cash flow volatility), equity return, sales growth, and non-debt tax shield.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This research also intends to see the leverage difference in high quality (HQ) and moderate-low quality (M-LQ). This research is inspired by Mittoo and Zhang (2010) who have done similar study on the impact of bond market access (measured by having a credit rating) on leverage for Canadian high quality (HQ) and low quality firms (LQ).Followed by, Judge and Korzhenitskaya (2012) attempted a study on credit market conditions and the impact of access to the public debt market (bond market) on leverage.Ever since that, bond market access and leverage have caught many researchers' attention and became a popular topic of research especially after phases of financial crisis when companies have turned from private debt borrowing to issuing bond (Judge and Korzhenitskaya, 2012). Furthermore, the similar research in the past was mostly focusing on testing much larger and deeper bond markets like the United States, United Kingdom, and Canada; the firm samples involved were huge (thousands of samples).…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Bond Market Access and Credit Quality on Leverage: Evidence on Malaysian Firms

Zulkiply¹,

Miras²

2016

IJABM

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The purpose of this paper is to study the impact of bond market access and credit quality on leverage. Therefore, firms were classified by bond market accessibility (with and without access) and the quality of credit ratings they possessed (HQ or M-LQ). A sample size of 63 firms without access was chosen based on random sampling out of the Bursa Malaysia listed firms. The findings of the research show that the firms with access' leverage is higher than those without access as they are able to borrow more than those firms without access whose source of debt finance is probably restricted to private debt such as banks. Other than that, the researcher also found that the M-LQ firms have significantly higher leverage than the HQ firms. In this research, it was also learned that the firms with access to bond market differ in terms of firm characteristics as compared to the firms without access to bond market. In addition to that, the data analysis done in this research is much simpler if compared to any other existing bond market access and leverage literatures. Therefore, research in future can focus more on making a deeper analysis so better findings can be drawn.

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Section: Total Firm Samplesupporting

confidence: 76%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Impact of Bond Market Access and Credit Quality on Leverage: Evidence on Malaysian Firms

Zulkiply¹,

Miras²

2016

IJABM

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“…Furthermore, the identification of general reasons and macroeconomic consequences for capital structure in the conditions of a highly volatile financial market and, consequently, periodic financial crises, appears to be a little-investigated issue. In several existing studies on the specified issues the authors reach a consensus for the first time that economic downturns exert a significant influence on the company's financial behavior (Duchin et al, 2010;Judge and Korzhenitskaya, 2012;Iqbal and Kume, 2013;Akbar et al, 2013;Harrison and Widjaja, 2014).…”

Section: Introductionmentioning

confidence: 99%

Econometric Analysis of the Influence of Macroeconomic Factors on Capital Structure of Russian Corporations under Crisis Conditions

Metelskaya¹

2020

Preprint

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The study reveals the influence of macroeconomic factors on decisions about the optimal capital structure formation under financial globalization, in view of ever-changing factors of the external economic and geopolitical environment. The study is aimed at empirical testing of hypotheses on how the level of financial leverage of corporations depends on traditional determinants during and after the financial crisis under the emerging market conditions in Russia. The study deals with a large data set of 49 public joint stock companies from 7 leading Russian economic sectors for the period from 2011 to 2017. According to the correlation-and-regression analysis results, (1) the use of traditional theories of capital structure under the conditions of current financial globalization in a country with a developing economy proves to be ineffective for the optimal capital structure formation (2) the corporate capital structure formation is strongly influenced by macroeconomic factors, which is most evidently manifested during and after the crisis, (3) the financial crisis exerts a strong influence on the corporate capital structure, (4) the determinant of stock market development has a significant influence on leverage and plays a prominent role in making financial decisions after the financial crisis.

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“…We hypothesize that firms most sensitive to investor sentiment will be most affected by the credit cycle and we expect opaque firms to be most constrained by the availability of funds especially in periods of low credit. Judge and Korzhenitskaya (2012) further motivates our research question. They find that the supply of credit is found to be inelastic and that specific type of firms face different prices and limited debt availability from lenders due to their characteristics.…”

Section: Literature On the Credit Cyclementioning

confidence: 87%

Two Essays on Macro-Financial Linkages

Moreale¹

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Credit market conditions and the impact of access to the public debt market on corporate leverage

Cited by 19 publications

References 28 publications

The Impact of Bond Market Access and Credit Quality on Leverage: Evidence on Malaysian Firms

The Impact of Bond Market Access and Credit Quality on Leverage: Evidence on Malaysian Firms

Econometric Analysis of the Influence of Macroeconomic Factors on Capital Structure of Russian Corporations under Crisis Conditions

Two Essays on Macro-Financial Linkages

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