Timing of debt issues: Evidence from a panel of Tunisian and French firms

Khemaies Bougatef () and Jameleddine Chichti
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Khemaies Bougatef: University of La Manouba, Tunisia

Economics Bulletin, 2011, vol. 31, issue 2, 1188-1197

Abstract: Recent literature argues that market timing becomes the factor that shapes financing policies. However, empirical studies on debt market timing still less numerous than those on equity market timing. This paper seeks to investigate the relevance of market timing considerations on debt issues using a panel of Tunisian and French listed firms. We have documented that net debt issuance is a decrease function of the market monetary rate. Moreover, our findings reveals that Tunisian firms succeed to raise their values by issuing debt when they expect that interest rates will increase. By contrast, french firms fail to reduce their overall cost of capital.

Keywords: capital structure; debt market timing; interest rate; market conditions; panel data (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2011-04-17
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