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Institutional Investor Horizons, Information Environment, and Firm Financing Decisions
Xin (Simba) Chang1; Yangyang Chen2; Kangkang Fu3; Endong Yang4
2018
Source PublicationSocial Science Research Network
ISSN1556-5068
Abstract

We provide evidence that investment horizons of institutional shareholders affect firms’ financing decisions. We find that short-term institutional ownership positively affects firms’ likelihood of equity relative to debt issues, the size of equity issues, and the likelihood of long-term relative to short-term debt issues. Firms held more by short-term institutions have lower financial leverage and longer debt maturities. These results suggest that short-horizon institutions, backed by buy-side research, improve the transparency of the information environment, which allows firms to issue more information-sensitive securities. Our findings suggest that institutional investor horizons influence firms’ financing decisions by shaping their information environment.

KeywordInstitutional Ownership Investor Horizons Information Asymmetry Capital Structure Debt Maturity
DOIhttp://dx.doi.org/10.2139/ssrn.2042476
Language英语
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Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Affiliation1.Nanyang Business School, Nanyang Technological University
2.Hong Kong Polytechnic University - Faculty of Business
3.Hong Kong Baptist University
4.University of Macau
Recommended Citation
GB/T 7714
Xin ,Yangyang Chen,Kangkang Fu,et al. Institutional Investor Horizons, Information Environment, and Firm Financing Decisions[J]. Social Science Research Network,2018.
APA Xin ,Yangyang Chen,Kangkang Fu,&Endong Yang.(2018).Institutional Investor Horizons, Information Environment, and Firm Financing Decisions.Social Science Research Network.
MLA Xin ,et al."Institutional Investor Horizons, Information Environment, and Firm Financing Decisions".Social Science Research Network (2018).
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