Asymmetric peer effects in capital structure dynamics

Hyun Joong Im

doi:10.1016/j.econlet.2018.12.019

Asymmetric peer effects in capital structure dynamics

Hyun Joong Im

School of Business Administration

Research output: Contribution to journal › Article › peer-review

10 Scopus citations

Abstract

Using a semiparametric smooth-coefficient partial adjustment model, this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms. Overlevered firms’ adjustment speeds and peer firm shocks have a U-shaped relationship, while underlevered firms’ adjustment speeds monotonically increase with peer firm shocks.

Original language	English
Pages (from-to)	17-22
Number of pages	6
Journal	Economics Letters
Volume	176
DOIs	https://doi.org/10.1016/j.econlet.2018.12.019
State	Published - Mar 2019

Keywords

Capital structure
Leverage dynamics
Peer effects
Speed of adjustment

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10.1016/j.econlet.2018.12.019

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title = "Asymmetric peer effects in capital structure dynamics",

abstract = "Using a semiparametric smooth-coefficient partial adjustment model, this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms. Overlevered firms{\textquoteright} adjustment speeds and peer firm shocks have a U-shaped relationship, while underlevered firms{\textquoteright} adjustment speeds monotonically increase with peer firm shocks.",

keywords = "Capital structure, Leverage dynamics, Peer effects, Speed of adjustment",

author = "Im, \{Hyun Joong\}",

note = "Publisher Copyright: {\textcopyright} 2018 Elsevier B.V.",

year = "2019",

month = mar,

doi = "10.1016/j.econlet.2018.12.019",

language = "English",

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T1 - Asymmetric peer effects in capital structure dynamics

AU - Im, Hyun Joong

PY - 2019/3

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N2 - Using a semiparametric smooth-coefficient partial adjustment model, this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms. Overlevered firms’ adjustment speeds and peer firm shocks have a U-shaped relationship, while underlevered firms’ adjustment speeds monotonically increase with peer firm shocks.

AB - Using a semiparametric smooth-coefficient partial adjustment model, this study finds evidence for asymmetric peer effects on capital structure adjustment speeds between overlevered and underlevered firms. Overlevered firms’ adjustment speeds and peer firm shocks have a U-shaped relationship, while underlevered firms’ adjustment speeds monotonically increase with peer firm shocks.

KW - Capital structure

KW - Leverage dynamics

KW - Peer effects

KW - Speed of adjustment

UR - https://www.scopus.com/pages/publications/85058541969

U2 - 10.1016/j.econlet.2018.12.019

DO - 10.1016/j.econlet.2018.12.019

M3 - Article

AN - SCOPUS:85058541969

SN - 0165-1765

VL - 176

SP - 17

EP - 22

JO - Economics Letters

JF - Economics Letters

ER -

Asymmetric peer effects in capital structure dynamics

Abstract

Keywords

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