Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2019.1699438
Debt capacity, debt choice, and underinvestment problem: Evidence from China
Kalim-Ullah Bhat
Shihua Chen
Yan Chen
Khalil Jebran
Sažetak
This study investigates how short-term debt and debt capacity
help firms to make efficient financing decisions and reduce underinvestment
problem. The sample includes Chinese nonfinancial
firms listed on the Shanghai and Shenzhen Stock Exchanges over
the period 2007 to 2017. The findings indicate that short-term
debt is positively related to leverage. The results also indicate that
growth positively influences leverage. The results further show
that short-term debt enhances the positive impact of growth on
leverage. These findings reveal that short-term debt makes firms
financially flexible, and allows them to obtain more cost-effective
debt by repricing and renegotiation of debt contracts in the presence
of valuable growth opportunities. Furthermore, the results
illustrate that debt capacity is positively associated with leverage,
suggesting that debt capacity helps firms to have an easy access
to the credit market and reduce liquidity risk. Overall, the findings
remain consistent across different types of firms (state-owned
[S.O.E.] and non-state-owned enterprises [N.S.O.E.]) and by considering
alternative proxy of growth.
Ključne riječi
Chinese firms; debt capacity; short-term debt; growth; leverage
Hrčak ID:
254384
URI
Datum izdavanja:
9.2.2021.
Posjeta: 1.356 *