Asymmetric peer effects in capital structure dynamics
Hyun Joong Im ()
Economics Letters, 2019, vol. 176, issue C, 17-22
Using a semiparametric smooth-coefficient partial adjustment model, this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms. Overlevered firms’ adjustment speeds and peer firm shocks have a U-shaped relationship, while underlevered firms’ adjustment speeds monotonically increase with peer firm shocks.
Keywords: Peer effects; Capital structure; Speed of adjustment; Leverage dynamics (search for similar items in EconPapers)
JEL-codes: G32 D25 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:176:y:2019:i:c:p:17-22
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