Curtin University Homepage
  • Library
  • Help
    • Admin

    espace - Curtin’s institutional repository

    JavaScript is disabled for your browser. Some features of this site may not work without it.
    View Item 
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item
    • espace Home
    • espace
    • Curtin Research Publications
    • View Item

    Debt-equity choices, R&D investment and market timing

    Access Status
    Fulltext not available
    Authors
    Lewis, Craig M
    Tan, Yongxian
    Date
    2016
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Lewis, C.M. and Tan, Y. 2016. Debt-equity choices, R&D investment and market timing. Journal of Financial Economics. 119: pp. 599-610.
    Source Title
    Journal of Financial Economics
    DOI
    10.1016/j.jfineco.2016.01.017
    ISSN
    0304-405X
    Faculty
    Faculty of Business and Law
    School
    School of Accounting, Economics and Finance
    URI
    http://hdl.handle.net/20.500.11937/89112
    Collection
    • Curtin Research Publications
    Abstract

    In this paper, we examine whether managers time their debt-equity choices to exploit market mispricing. Controlling for the level of external financing and corporate investment activities, we find evidence consistent with the market timing hypothesis. We find managers issue more equity relative to debt when analysts are relatively optimistic about firms’ long-term growth prospects. Moreover, equity issuers earn lower returns than debt issuers at subsequent earnings announcements. Controlling for research and development (R&D) investment, we find that, consistent with the market timing hypothesis and inconsistent with the extant empirical literature, the debt-equity composition of external financing predicts year-ahead stock return.

    Related items

    Showing items related by title, author, creator and subject.

    • An analysis of Australian mutual fund performance and market relationships
      Pojanavatee, Sasipa (2013)
      Mutual funds are emerging as an opportunity for investors to automatically diversify their investments in such a way that all their money is pooled and the investment decisions are left to a professional manager. There ...
    • Development and structuring of commercial mortgage-backed securities in Australia
      Chikolwa, Bwembya C (2008)
      According to the Reserve Bank of Australia (2006) the increased supply of Commercial Mortgage-Backed Securities (CMBS), with a range of subordination, has broadened the investor base in real estate debt markets and reduced ...
    • Does M&A financing affect firm performance under different ownership types?
      Chen, J.; Zhao, X.; Niu, X.; Fan, Ying Han ; Taylor, Grantley (2020)
      Mergers and acquisitions (M&A) are an essential way for enterprises to achieve sustainable development. As large sums of money are typically involved in M&A transactions, financing is a vital factor in outcomes. This study ...
    Advanced search

    Browse

    Communities & CollectionsIssue DateAuthorTitleSubjectDocument TypeThis CollectionIssue DateAuthorTitleSubjectDocument Type

    My Account

    Admin

    Statistics

    Most Popular ItemsStatistics by CountryMost Popular Authors

    Follow Curtin

    • 
    • 
    • 
    • 
    • 

    CRICOS Provider Code: 00301JABN: 99 143 842 569TEQSA: PRV12158

    Copyright | Disclaimer | Privacy statement | Accessibility

    Curtin would like to pay respect to the Aboriginal and Torres Strait Islander members of our community by acknowledging the traditional owners of the land on which the Perth campus is located, the Whadjuk people of the Nyungar Nation; and on our Kalgoorlie campus, the Wongutha people of the North-Eastern Goldfields.