ESG greenwashing and corporate debt financing costs
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Keywords:
Greenwashing
Corporate Finance
Debt financing
ABSTRACT This article examines the determinants of the mix of private and public debt using detailed information on the debt structure of 250 publicly traded corporations from 1980 through 1990. We find that the relationship between bank borrowing and the importance of growth opportunities depends on the number of banks the firm uses and whether the firm has public debt outstanding. For firms with a single bank relationship, the reliance on bank debt is negatively related to the importance of growth opportunities. In contrast, among firms borrowing from multiple banks, the relationship is positive.
Debt financing
Private information retrieval
Public information
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Do prevailing corporate tax rates have any significant impact on corporate financing decision? This is the most controversial question in corporate finance. Theories suggest a positive impact of corporate tax on debt financing as interest is a tax deductible expense and many empirical studies favour this. However, factors dominating in Emerging economies differ from those in developed economies as the priorities of the two are different. Under situation where external capital inflow plays a vital role in the development of the economy, it would be interesting to see whether corporate tax maintains its dominating position as suggested by earlier studies. This paper examines this issue in detail through dynamic panel data model for firms in India.
Corporate Finance
Corporate Tax
External financing
Debt financing
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Deductible
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Abstract In corporate valuation, it is common to assume either passive or active debt management. However, it is questionable whether these pure financing policies reflect the real financing policies of firms with a sufficient degree of accuracy. This shortcoming has led to the development of mixed financing strategies as combinations of pure financing strategies. Whereas hybrid financing is directly linked to the two-phase model, it is unclear how to apply discontinuous financing in such a setting. In this study, according to the two versions of hybrid financing, we analyze the implementation of discontinuous financing in a two-phase model. Thereby, we present a simpler and more intuitive derivation of the valuation equation for discontinuous financing to increase its acceptance and its use for corporate valuation practice. Moreover, we compare the different mixed financing strategies with each other theoretically, and we conduct simulations to elucidate the impact on market values and the sensitivities of input parameters. The study concludes that the presented mixed financing strategies can help in the attempt to reflect the real financing behavior of firms more accurately and, therefore, constitute a valuable alternative to pure financing strategies for valuation.
Corporate Finance
Debt financing
Internal financing
External financing
Risk financing
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As a result of deregulation, there was a dramatic shift during the 1980s in Japan away from bank debt financing towards public debt financing: in 1975, more than 90% of the corporate debt of public companies was bank debt; in 1992 it was less than 50%. This paper presents a theory of the choice between bank debt and public debt and then examines the theory using firm level data on borrowing sources in Japan. We find that high net worth companies are more prone to use public debt. We also find that the more successful members of industrial groups (or keiretsu) and less successful owner-managed firms tended to access the public debt markets. We offer a number of interpretations of these results in light of the theory.
Keiretsu
Deregulation
Senior debt
Recourse debt
Debt financing
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Leverage (statistics)
Corporate Finance
International business
Debt financing
External financing
International finance
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The Effect of Overconfidence on Decision-Making:a Study Based on Corporate Financing Decision-Making
Compared with other employees,the managers of a company are more prone to self-attribution,and show a stronger overconfidence which has a substantial impact on corporate decision-making. Overconfidence theory is considered as one of the most important research results of behavioral finance. The present study examines one behavior of the managerial overconfidence and its influence upon the corporate financing decision. Using a sample that includes manufacturing companies listed on the Chinese stock markets from 2007 to 2012,the paper suggests that overconfident manages tend to debt financing in external finance,and inclined to make short-term and financial debt financing. The conclusion suggests that managerial overconfidence is an important factor affecting the corporate financing decision.
Overconfidence effect
Corporate Finance
Debt financing
External financing
Sample (material)
Stock (firearms)
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Corporate Finance
Debt financing
External financing
Research Object
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Greenwashing
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Corporate Finance
Project finance
Leverage (statistics)
Agency cost
Debt financing
Internal financing
Tax shield
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As a result of deregulation, there was a dramatic shift during the 1980s in Japan away from bank debt financing towards public debt financing: in 1975, more than 90% of the corporate debt of public companies was bank debt; in 1992 it was less than 50%. This paper presents a theory of the choice between bank debt and public debt and then examines the theory using firm level data on borrowing sources in Japan. We find that high net worth companies are more prone to use public debt. We also find that the more successful members of industrial groups (or keiretsu) and less successful owner-managed firms tended to access the public debt markets. We offer a number of interpretations of these results in light of the theory.
Keiretsu
Deregulation
Senior debt
Recourse debt
Debt financing
Debt ratio
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Citations (199)