Signaling Credit Risk in Agriculture: Implications for Capital Structure Analysis

Jianmei Zhao, Peter J. Barry and Ani Katchova

Journal of Agricultural and Applied Economics, 2008, vol. 40, issue 3, 805-820

Abstract: Signaling is an important element in the lender-borrower relationship that influences the cost and availability of debt capital to agricultural borrowers. This paper analyzes the effects of signaling on farm capital structure in conjunction with the pecking order and trade-off theories. The aggregate estimation indicates that signaling does affect agricultural credit relationships through measures of past cash flow and profitability. High-quality borrowers achieve greater credit capacity by providing lenders with valid signals of their financial status, while adjusting toward target debt levels over time and following the pecking order relationship in the short run.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Journal Article: Signaling Credit Risk in Agriculture: Implications for Capital Structure Analysis (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:40:y:2008:i:03:p:805-820_00

Access Statistics for this article

More articles in Journal of Agricultural and Applied Economics from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().