Capitalized Leases, Debt and Preferred Stock— International Evidence for Priority Structure
Date Issued
2006
Date
2006
Author(s)
Tan, Helen Han-Hsuan
DOI
en-US
Abstract
This study examines the priority structure across a sample of 5743 firms from 30 developed and developing countries for the period from 1992 to 2003 with a two stage procedure. I analyze the variation in the use of capitalized leases, debt and preferred stock as a fraction of the firm’s market value and as a fraction of total fixed claims. Institutional factors including the development of legal and financial systems are taken into consideration. The evidence provides substantial support for information asymmetry, cost of information and tax hypotheses. Financial distress hypothesis is weakly supported and little evidence supports agency cost hypotheses. It is also found that country factors do affect priority structure. Substitution effect between legal protection for creditor rights and priority structure is observed and the development of financial system appears to influence financing choices of firms. Development of financial intermediaries encourages the use of capitalized leases while the development of stock market discourages the use of preferred stock. The interaction between institutional factors and priority structure requires further study.
Subjects
求償權順位結構
代理成本
租稅成本
財務危機成本
制度性因子
Priority Structure
Agency Cost
Information Asymmetry
Tax
Financial Distress
Institutional Factors
Type
thesis
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