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Access to Capital, Capital Structure, and the Funding of the Firm

The Journal of finance (New York), 2009-02, Vol.64 (1), p.263-308 [Peer Reviewed Journal]

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Title:
Access to Capital, Capital Structure, and the Funding of the Firm
Author: BRAV, OMER
Subjects: Business structures ; Capital market ; Capital markets ; Capital structure ; Comparative analysis ; Debt ; Debt financing ; Economic policy ; Empirical research ; Equity ; Equity capital ; Finance ; Financial analysis ; Financial leverage ; Issued capital ; Private enterprises ; Private equity ; Private sector ; Public enterprises ; Public sector ; Shareholders ; Studies ; United Kingdom
Is Part Of: The Journal of finance (New York), 2009-02, Vol.64 (1), p.263-308
Description: Based upon a large data set of public and private firms in the United Kingdom, I find that compared to their public counterparts, private firms rely almost exclusively on debt financing, have higher leverage ratios, and tend to avoid external capital markets, leading to a greater sensitivity of their capital structures to fluctuations in performance. I argue that these differences are due to private equity being more costly than public equity. I further examine the private firms subsample to show that private equity is more costly than its public counterpart due to information asymmetry and the desire to maintain control.
Publisher: Malden, USA: Blackwell Publishing Inc
Language: English
Identifier: ISSN: 0022-1082
EISSN: 1540-6261
DOI: 10.1111/j.1540-6261.2008.01434.x
CODEN: JLFIAN
Source: Alma/SFX Local Collection

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