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- Publisher Website: 10.1017/S002210901800090X
- Scopus: eid_2-s2.0-85053134353
- WOS: WOS:000461565600001
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Article: Covenants, Creditors' Simultaneous Equity Holdings, and Firm Investment Policies
Title | Covenants, Creditors' Simultaneous Equity Holdings, and Firm Investment Policies |
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Authors | |
Issue Date | 2018 |
Publisher | Cambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=jfq |
Citation | Journal of Financial and Quantitative Analysis, 2018 How to Cite? |
Abstract | We analyze how creditors’ simultaneous debt and equity holdings affect firm investment policies. Firms with dual ownership are less likely to have capital expenditure restrictions in loan contracts and the relation varies in predicted ways with borrowers’ monitoring needs and dual owners’ monitoring capacity. Less frequent use of capital expenditure restrictions, however, does not result in borrowers’ risk-shifting. Dual ownership firms are also more likely to be granted an unconditional waiver and do not significantly reduce debt issuance or investment expenditures after a financial covenant violation. Our results highlight how dual ownership can help mitigate shareholder-creditor conflicts. |
Persistent Identifier | http://hdl.handle.net/10722/247640 |
ISSN | 2023 Impact Factor: 3.7 2023 SCImago Journal Rankings: 3.980 |
SSRN | |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chava, S | - |
dc.contributor.author | Wang, R | - |
dc.contributor.author | Zou, H | - |
dc.date.accessioned | 2017-10-18T08:30:19Z | - |
dc.date.available | 2017-10-18T08:30:19Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Journal of Financial and Quantitative Analysis, 2018 | - |
dc.identifier.issn | 0022-1090 | - |
dc.identifier.uri | http://hdl.handle.net/10722/247640 | - |
dc.description.abstract | We analyze how creditors’ simultaneous debt and equity holdings affect firm investment policies. Firms with dual ownership are less likely to have capital expenditure restrictions in loan contracts and the relation varies in predicted ways with borrowers’ monitoring needs and dual owners’ monitoring capacity. Less frequent use of capital expenditure restrictions, however, does not result in borrowers’ risk-shifting. Dual ownership firms are also more likely to be granted an unconditional waiver and do not significantly reduce debt issuance or investment expenditures after a financial covenant violation. Our results highlight how dual ownership can help mitigate shareholder-creditor conflicts. | - |
dc.language | eng | - |
dc.publisher | Cambridge University Press. The Journal's web site is located at http://journals.cambridge.org/action/displayJournal?jid=jfq | - |
dc.relation.ispartof | Journal of Financial and Quantitative Analysis | - |
dc.rights | Journal of Financial and Quantitative Analysis. Copyright © Cambridge University Press. | - |
dc.rights | This article has been published in a revised form in [Journal] [http://doi.org/XXX]. This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © copyright holder. | - |
dc.title | Covenants, Creditors' Simultaneous Equity Holdings, and Firm Investment Policies | - |
dc.type | Article | - |
dc.identifier.email | Zou, H: hongzou@hku.hk | - |
dc.identifier.authority | Zou, H=rp01800 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1017/S002210901800090X | - |
dc.identifier.scopus | eid_2-s2.0-85053134353 | - |
dc.identifier.hkuros | 279997 | - |
dc.identifier.isi | WOS:000461565600001 | - |
dc.publisher.place | United Kingdom | - |
dc.identifier.ssrn | 2372296 | - |
dc.identifier.issnl | 0022-1090 | - |