Corporate site visits and the speed of leverage adjustment

Zhiling Cao, Meng Chen, Lili Zhao and Guozheng Yang

Finance Research Letters, 2025, vol. 73, issue C

Abstract: Our study examines the impact of corporate site visits on the speed of leverage adjustment. We demonstrate that the visits significantly accelerate leverage adjustment, especially in firms with high analyst forecast dispersion and severe financial constraints. Additionally, corporate site visits act as a catalyst, aiding firms in moving toward their target leverage by reducing information asymmetry and easing financial constraints. However, excessive leverage can hinder the speed of adjustment, even when site visits are involved. These findings provide valuable insights for policymakers to formulate effective policy, enhancing the understanding of corporate financial positions and leverage dynamics.

Keywords: Corporate site visits; Leverage adjustment; Financial constraints; Information asymmetry (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016672

DOI: 10.1016/j.frl.2024.106638

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