Timing of earnings and capital structure

Anton Miglo

The North American Journal of Economics and Finance, 2017, vol. 40, issue C, 1-15

Abstract: This paper shows that asymmetric information about the timing of earnings can affect capital structure. It sheds new light on the following issues: why profitable firms may be interested in issuing equity and why debt does not necessarily signal a firm’s quality. These issues seem to be puzzling from the classical pecking-order theory or signalling theory point of view. The paper also contributes to the analysis of the link between capital structure choice and a firm’s expected performance (short-term and long-term). An empirical analysis confirms most of our theoretical results.

Keywords: Asymmetric information; Pecking-order theory; Signalling; Timing of earnings (search for similar items in EconPapers)
JEL-codes: D82 D86 G32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Timing of Earnings and Capital Structure (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:40:y:2017:i:c:p:1-15

DOI: 10.1016/j.najef.2017.01.001

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