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The purpose of this paper is to investigate the role of “soft information” in firms’ debt issue and capital structure choices, and present a new model reconciling the gap between theories of capital structure and empirical findings.

The paper develops an analytical model of debt issues under asymmetric information in a setting where, in addition to observing the amount of debt the firm issues, outside investors obtain “soft information” signals through their own information production or noisy voluntary disclosures made by the firm. This paper analyzes the benefit and cost for the firm's debt issue decisions in this setting, and specifies the effect of soft information on these decisions.

If sufficiently precise soft information is available to outside investors, the firm's debt issue behavior is significantly altered relative to that in existing models. In particular, an inverted‐U shape relationship is found between the intrinsic value of the firm and the amount of debt it issues. Moreover, there is a negative relationship between the amount of debt the firm issues and the precision of soft information. Further, it is found that firms about which outside investors receive more favorable soft information issue less debt.

The model predicts an inverted‐U shape relationship between firms’ debt ratios and operating performance. It also predicts that firms about which outside investors receive more favorable or more precise soft information have lower debt ratios on average. A rationale is provided for the existence of firms’ investor relations departments.

Firms’ capital structure choices remain a topic of significant importance. This paper incorporates the soft informations into firms’ debt issue decisions and proposes a new model of capital structure that generates insights into firms’ financing decisions and disclosure decisions, as well as information production by outside investors.

This paper aims to derive insights about optimal managerial compensation and firm capital structure in unionized firms.

This paper uses applied game theory to address problems of CEO motivation in companies with unionized workforces.

Managers can use high levels of debt and costly bankruptcy to win wage concessions from workers. Alternatively, workers can obstruct management in the detection of poor work. CEO compensation that encourages rent sharing may reduce union hostility and associated deadweight losses. Shareholder value may be maximized by CEO incentive contracts with limited upsides, lower levels of pay, and some entrenchment protections.

This is the only study to use applied game theory to look at how CEO pay and capital structure affects the productivity of a unionized workforce.

This paper identifies five types of insolvency in English football: clubs that have failed to cope with relegation; failed to pay monies due to the UK government; seen 'soft debts' become 'hard debts'; lost the ownership of their stadium; or have been 'repeat offenders'. As the second of a three-phase research project, the paper concludes with an indication of the final phase research and implications of the findings so far for other professional sports.

This study aims to investigate how opening high-speed railways affects the cost of debt financing based on China's background.

Using panel data on Chinese listed firms from 2008 to 2017, this study constructs a quasi-natural experiment and adopts a difference-in-difference model with multiple time periods to empirically examine the relation between the high-speed railway openings and debt financing cost.

Our results show that opening high-speed railways reduces the cost of debt financing, and this negative correlation is more significant in non-state firms, firms with weaker internal control, and firms that hire non-Big Four auditors. Besides, we explore the impact mechanisms and find that opening high-speed railways improves analyst attention, institutional investor participation, and information disclosure quality, which in turn lowers the cost of debt financing.

The results imply that the opening of high-speed railways helps to alleviate the information asymmetry and adverse selection between firms and creditors and ultimately reduces the cost of corporate debt financing.

This paper can inform firms and stakeholders about the impact of opening high-speed railways on debt financing cost: it improves the information environment, reduces the geographical location restrictions of debt financing, ensures the reasonable pricing of corporate debt, and thus promotes the healthy and sound development of the debt market.

This paper provides theoretical support and empirical evidence for the impact of infrastructure construction on the information environment of the debt market in China, which enriches the research on the “high-speed railway economy.” In addition, as an exogenous event, the opening of high-speed railways instantly shortens the time distance between firms and external stakeholders, which gives us a natural environment to conduct empirical research, thus providing a new perspective for financial research on firms' geographical location.

The purpose of this paper is to expand the investor sentiment’s effect on investment efficiency to the layer of “credit financing,” studying whether investor sentiment can affect credit financing level and the inner mechanism of the effect.

The authors obtain firm-level data from the Shanghai and Shenzhen stock markets and using panel estimation techniques examine whether investor sentiment can affect credit financing level and the inner mechanism of the effect.

This paper finds that credit financing plays the role of partial media in the process of investor sentiment affecting investment efficiency. Based on the funds increasing effect, with the high-investor sentiment and increasing credit financing, corporations alleviate the financing constraints, but also provide a convenient for the abuse of corporate funds. So, investor sentiment positively associates with enterprises’ overinvestment, while investor sentiment negatively associates with enterprises’ underinvestment. Relying on the particular system background and property right environment in China, this paper finds that investor sentiment has an effect on the overinvestment of state-owned enterprises and the underinvestment of private enterprises through credit financing channel, while it does not function in the overinvestment of private enterprises. The reason of the difference is that under the soft budget constraint in the country, the credit preference of state-owned enterprises and the creditor’s rights management of banks are partially absent.

By fusing the special financial environment and institutional background, this thesis further includes in the analysis frame the difference in governance effect by credit financing between state-owned and privately owned listed companies, and further analyzes the difference in impact on investment efficiency in enterprises of different natures after investor sentiment has affected enterprise credit financing.

This paper has verified the constraint assumption and deepened the research work on bank credit supply and answered practical questions such as whether the banks in the country exercise supervision function over the listed companies and on which kind of listed companies the supervision function plays a more effective role.

As an unofficial substitution mechanism, bank-enterprise relationship can elevate the investment efficiency by private owned enterprises. Based on the timely research results on credit financing, reference is provided for private listed companies to utilize investor sentiment to improve its investment efficiency.

This paper has proved the specific path which creates the dual effects on resources allocation by investor sentiment, that is, the intermediary transmission in credit financing, clarifying the mechanism of action by which investor sentiment affects the efficiency of enterprise investment and making incremental contribution to the research of how investor sentiment affects the efficiency of enterprise investment.

The study examines the impacts of debt financing on infrastructure development, investment, creation of new business entities, subsidies to private sector and GDP growth.

The methodology is based on five simultaneous equations which have been estimated through panel least square.

The most important conclusion of this study is the significant role of sovereign bonds in determination of subsidies to private sector. The role of domestic credit is important in South Asian context because of its significant role in creation of new businesses.

This study supports the enhancement in credit financing to private sector for creation of new business activities in the economy.

The improvement in liquidity position by enhancing domestic credit facilities may ensure the sustainability and continuity of business activities. Such activities may improve GDP growth in future.

The most important aspect of the study is to identify the role of debt financing in subsidies and creation of new businesses which are important elements of social economics.

Usually the impacts of sovereign bonds and external debts on infrastructure development and GDP growth are examined. But, to relate these debts to creation of business entities and subsidies is a new dimension.

To investigate the relations between company‐specific financial factors and the capital structure decisions of Estonian non‐financial companies and to examine behavioral differences between companies of different sizes.

Totally 260 Estonian non‐financial companies are divided into small‐, medium‐ and large‐companies, each sample being analysed by correlation‐regression method in two aspects – impact of financial factors on static capital structure and capital structure dynamics. Companies' financial statements of 2002/2003 or 2003/2004 are used. Finally, capital structure adjustments in extreme boundaries are analyzed.

Capital structure decisions among Estonian non‐financial companies are driven by the pecking order theory, the evidences supporting optimal capital structure choices in long run remain weak. The robustness of the pecking order behavior significantly differs between smaller and bigger companies.

Limited number of companies surveyed due to hard manual work required to adjust financial accounts. Implication of findings is somewhat limited as the study covers a single country.

The paper helps to identify financial drivers and to understand motivations behind capital structure decisions of emerging market companies and it supplements earlier studies. Quasi‐equity debt distorts the observed capital structures. Capital structure is adjusted for operating leases and quasi‐equity debt to identify true amount put at risk and its mix between owners and external lenders.

Focusing on a sample of firms from environmentally sensitive industries over several years, this study aims to reexamine the association between environmental disclosure and environmental performance.

The authors use a panel data analysis to examine how the interaction between environmental performance and economic and legitimacy factors influence firms’ environmental disclosures.

Results suggest that environmental performance moderates the effect of economic and legitimacy incentives on firms’ propensity to provide proprietary environmental disclosure, with both sets of incentives being influential. More specifically, there appears to be a reporting bias based on the firm’s environmental performance whereas the high-performers disclose more environmental information in the three following vehicles: annual report, 10-K and sustainability reports combined. Results also show that economic and legitimacy factors influence the disclosure decisions of the low and high environmental performers differently.

Understanding the determinants of environmental disclosure for high and low environmental performers helps regulators to close the reporting gap between these firms.

There is little evidence to suggest that firms with low-environmental performance attempt to use their disclosures to legitimize their environmental operations.

The study examines environmental disclosures of 78 firms over a period of 14 years in annual, 10-K and sustainability reports. The panel data analysis controls for significant cross-sectional and period effects.

Examines Eastern Europe’s struggle to privatise since the end of Communism; in particular reports on the experiences of Poland, Czechoslovakia and Russia. The danger of fast privatisation without restructuring is demonstrated by Czechoslovakia’s experience. Poland shows the importance of employing tight budget constraints. Russia demonstrates that privatisation in chaos is unlikely to produce real change.

The purpose of this study is to investigate whether capital structure affects accruals and real earnings management (AEM and REM) of nonfinancial firms listed on Pakistan Stock Exchange (PSX). Moreover, to investigate whether institutional development (ID) moderates the relation between capital structure and earnings management (EM).

Data were taken from annual reports of nonfinancial firms listed on the PSX during 2012–2019. Data of 150 firms for a period of eight years were found completed with respect to the variables used in this study. The generalized moments of methods estimator is used to estimate the effects of explanatory variables on earning management. Furthermore, fixed and random effects methods were used to estimate the impact of capital structure on AEM and REM.

Results show that all three measures of capital structure (i.e. total debt ratio, long-term debt ratio and short-term debt ratios) are inversely related to AEM. In contrast, all measures of capital structure are positively related to abnormal cash flow from operations. Total debt ratio and long-term debt ratio are negatively while short-term debt ratio is positively related to abnormal discretionary expenses. Total debt ratio and short-term debt ratio are significant and negatively related to abnormal production cost. Additionally, interaction terms of ID (i.e. rule of law and regulatory quality) significantly moderate the controlling role of debt on discretionary accruals. In sum, results show that the use of debt induces lender's monitoring. Consequently, managers move toward REM because of lower probability of being exposed.

Findings of this study have significant implications for managers and regulatory authorities. For instance, the use of debt increases the lender’s influence which restricts the managers to be involved in EM practices. Moreover, regulatory authorities are required to address the loopholes in regulations to refrain the managers to be engaged in EM.

To the best of the authors’ knowledge, this is the first study in Pakistan that has explored the impact of capital structure on AEM and REM. More importantly, a careful review of the literature affirms that this study is among the few studies that have used ID as a moderating variable to explain the relation between capital structure and EM.