Liquidity and capital structure

被引:152
作者
Lipson, Marc L. [1 ]
Mortal, Sandra [2 ]
机构
[1] Univ Virginia, Darden Grad Sch Business Adm, Charlottesville, VA 22901 USA
[2] Univ Memphis, Fogelman Coll Business & Econ, Memphis, TN 38152 USA
关键词
Capital structure; Liquidity; Market microstructure; STOCK-MARKET LIQUIDITY; CORPORATE-FINANCE; NASDAQ; DEBT; INFORMATION; TAXES; COSTS; MICROSTRUCTURE; DETERMINANTS; EQUILIBRIUM;
D O I
10.1016/j.finmar.2009.04.002
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We examine the relation between equity market liquidity and capital structure. We find that firms with more liquid equity have lower leverage and prefer equity financing when raising capital. For example, after sorting firms into size quintiles and then into liquidity quintiles, the average debt-to-asset ratio of the most liquid quintiles is about 38% while the average for the least liquid quintiles is 55%. Similar results are observed in panel analyses with clustered errors and using instrumental variables. Our results are consistent with equity market liquidity lowering the cost of equity and, therefore, inducing a greater reliance on equity financing. (C) 2009 Elsevier B.V. All rights reserved.
引用
收藏
页码:611 / 644
页数:34
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