Equity Recycling on markets--论文代写范文精选

51Due论文代写网精选essay代写范文：“Equity Recycling on markets” 确定股权约束，这将是有用的测试,未来的研究人员可以评估其他候选的综合金融限制措施，对于财务约束,公司将不得不面临一个非弹性债券供给曲线，和非弹性股票供给曲线。为此,我们提出使用另一种策略，来间接识别估计股票供给。在1989-2012年期间,美国上市公司经理人选择支付48.4%的股票发行,通过分红和股票回购的形式。

背后的假设是不观察股票面临的无弹性供应曲线，通过揭示偏好性,是否从外部投资者获得信息，对于股权关系问题和支出增加，会导致公司产生无约束,比较公共和私人公司的行为。下面的essay代写范文进行详述。

Abstract 
  Nevertheless, it would be useful to have a test that can identify equity constraints, so that future researchers can evaluate other candidate financial constraints measures comprehensively: to be classified as financially constrained, a firm would have to act as if it faced both an inelastic debt supply curve and an inelastic equity supply curve. To this end, we propose a third test using an alternative identification strategy to indirectly estimate the shape of the equity supply curve. Test 3 is motivated by the findings of Farre-Mensa, Michaely, and Schmalz (2013), who show that over the 1989-2012 period, U.S. public-firm managers chose to pay out 48.4% of their equity issuance proceeds during the same year, in the form of dividends or share repurchases. Farre-Mensa et al. call this practice “equity recycling.” The identifying assumption behind Test 3 is that we should not observe equity recycling among firms facing an inelastic supply of equity curve:29 equity recycling, by revealed preference, is an indicator that a firm is not concerned about its ability to raise equity and so is plausibly unconstrained. This is true whether the equity they recycle is raised from outside investors (e.g., via a seasoned equity offering or SEO) or from insiders (via employee stock option exercises).

  To establish power, and in particular to show that there is no spurious relation between equity issues and payout increases that would cause us to classify every subsample of firms as unconstrained, we turn once more to our comparison of the behavior of public and private firms. To the extent that private firms are more likely to face constraints in their ability to raise equity, we expect them not to engage in equity recycling. Table 6 confirms this prediction. Columns 1 and 2 show that for public firms, increases in equity issuance proceeds are associated with highly significant increases in total payouts (dividends plus repurchases, column 1) and in dividends (column 2). 

In other words, the average public firm appears to “recycle equity,” suggesting it is not financially constrained. Column 3, on the other hand, shows that private firms tend to cut their dividends at the same time they issue equity.31,32 A plausible interpretation is that private firms use a combination of equity issues and reductions in payouts to fund increases in their investment or operating needs. The point estimate suggests that the average private firm reduces its dividend by 0.31 percentage points of total assets for every 10 percentage-point increase in its equity-issuance-to-assets ratio. Column 4 shows that this effect is largest (in absolute value) for the smallest private firms and becomes monotonically smaller (though remaining significant) for larger firms.

  Comparing the behavior of ‘constrained’ and ‘unconstrained’ firms Table 7 reports the results of examining whether or not firms the literature classifies as financially constrained engage in equity recycling. For brevity, we focus on total payouts; results are economically unchanged if we model dividends only instead. Two results stand out. First, across all five measures, we find that supposedly constrained firms do recycle their equity proceeds. The recycled amounts are substantial: depending on the measure, ‘constrained’ firms pay out on average between 19% and 32% of the proceeds of their equity issues in the same year. And plenty of them have something to recycle: in any given year, between 73% and 80% of ‘constrained’ firms issue equity, depending on the measure.34

  Second, for only two of the five measures do ‘constrained’ firms recycle less than‘unconstrained’ firms: the dividend measure and the KZ index. (Unsurprisingly, dividend payers tend to distribute a significantly larger share of their equity proceeds than non-dividend payers.) Overall, firms classified as constrained by each of the five measures engage in “equity recycling” behavior, which is hard to reconcile with the notion that they are constrained in their ability to raise equity.

 Validating The Methodological Approach
  The results of our three tests paint a consistent picture: the behavior of firms the literature classifies as financially constrained does not appear to differ systematically from the behavior of firms typically classified as unconstrained. In particular, the average ‘constrained’ firm (just like the average ‘unconstrained’ one, and unlike small or medium-sized private firms) is able to 
• borrow more when its demand for debt increases exogenously (Test 1); 
• maintain borrowing levels when banks lending into its home state are hit with a tax shock that demonstrably affects local loan supply (Test 2); and 
• use a significant portion of the proceeds of their equity issues to increase their payouts to shareholders (Test 3). Taken together, these findings run counter to the notion that firms commonly classified in the literature as financially constrained face an inelastic supply of capital curve and so are indeed constrained.

  As a final validation of our methodological approach, we apply our tests to a subsample of public firms that are a priori likely to face inelastic capital supply curves and so are plausibly financially constrained: junk bond issuers. We offer this test in the same spirit as our earlier power tests using private firms. Table 8 reports the results. Columns 1 and 2 show that junk bond issuers fail Test 1: the tax sensitivity of debt among junk bond issuers is not statistically different from zero, for either leverage or log debt. This is consistent with junk bond issuers facing an inelastic debt supply curve on the margin. 29 Reinforcing this conclusion, columns 3 and 4 show that junk bond issuers reduce their debt holdings significantly when bank lending in their home state is hit with a tax increase and vice versa. This finding is consistent with the premise of Test 2 that the debt holdings of constrained firms should be sensitive to shifts in their local credit supply curve. Finally, unlike public firms in general and those the literature traditionally classifies as constrained, junk bond issuers do not engage in equity recycling. This is consistent with the premise of Test 3, as we should observe no equity recycling among constrained firms.

  The results in Table 8 help alleviate the concern that we fail to find support for traditional measures of financial constraints simply because our tests lack the power to identify financial constraints among any subsample of (public) firms. Indeed, the results are consistent with the hypothesis (but do not necessarily imply) that public firms with a below-investment grade credit rating face, on average, an inelastic supply of capital curve and thus are financially constrained.

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