Does institutional investor horizon influence US corporate financing decisions?

Sabri Boubaker, Lamia Chourou, Samir Saadi and Ligang Zhong

International Review of Financial Analysis, 2019, vol. 63, issue C, 382-394

Abstract: This paper examines whether and how institutional investment horizon influences corporate financing decisions. Consistent with our predictions, we find that longer institutional investment horizon is negatively associated with the likelihood that a firm issues equity and debt, and with the amount of security issuance. Our results also indicate that firms with longer investment horizon prefer debt to equity. We also document that debt maturity decreases with the level of ownership by long-term institutional investors. In addition, we show that firms with long-term institutional investors adjust their capital structure at a slower pace.

Keywords: Institutional investment horizon; Capital structure; Institutional monitoring; Leverage adjustment (search for similar items in EconPapers)
JEL-codes: D82 G32 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:63:y:2019:i:c:p:382-394

DOI: 10.1016/j.irfa.2017.09.001

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