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Target behavior and financing: how conclusive is the evidence?

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Target behavior and financing: how conclusive is the evidence? / Chang, Xin; Dasgupta, Sudipto.
In: Journal of Finance, Vol. 64, No. 4, 08.2009, p. 1767-1796.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Chang, X & Dasgupta, S 2009, 'Target behavior and financing: how conclusive is the evidence?', Journal of Finance, vol. 64, no. 4, pp. 1767-1796. https://doi.org/10.1111/j.1540-6261.2009.01479.x

APA

Chang, X., & Dasgupta, S. (2009). Target behavior and financing: how conclusive is the evidence? Journal of Finance, 64(4), 1767-1796. https://doi.org/10.1111/j.1540-6261.2009.01479.x

Vancouver

Chang X, Dasgupta S. Target behavior and financing: how conclusive is the evidence? Journal of Finance. 2009 Aug;64(4):1767-1796. doi: 10.1111/j.1540-6261.2009.01479.x

Author

Chang, Xin ; Dasgupta, Sudipto. / Target behavior and financing : how conclusive is the evidence?. In: Journal of Finance. 2009 ; Vol. 64, No. 4. pp. 1767-1796.

Bibtex

@article{2115dc24388543b09299865f2fd5224b,
title = "Target behavior and financing: how conclusive is the evidence?",
abstract = "The notion that firms have a debt ratio target that is a primary determinant of financing behavior is influential in finance. Yet, how definitive is the evidence? We address this issue by generating samples where financing is unrelated to a firm's current debt ratio or a target. We find that much of the available evidence in favor of target behavior based on leverage ratio changes can be reproduced for these samples. Taken together, our findings suggest that a number of existing tests of target behavior have no power to reject alternatives.",
author = "Xin Chang and Sudipto Dasgupta",
year = "2009",
month = aug,
doi = "10.1111/j.1540-6261.2009.01479.x",
language = "English",
volume = "64",
pages = "1767--1796",
journal = "Journal of Finance",
issn = "0022-1082",
publisher = "Wiley-Blackwell",
number = "4",

}

RIS

TY - JOUR

T1 - Target behavior and financing

T2 - how conclusive is the evidence?

AU - Chang, Xin

AU - Dasgupta, Sudipto

PY - 2009/8

Y1 - 2009/8

N2 - The notion that firms have a debt ratio target that is a primary determinant of financing behavior is influential in finance. Yet, how definitive is the evidence? We address this issue by generating samples where financing is unrelated to a firm's current debt ratio or a target. We find that much of the available evidence in favor of target behavior based on leverage ratio changes can be reproduced for these samples. Taken together, our findings suggest that a number of existing tests of target behavior have no power to reject alternatives.

AB - The notion that firms have a debt ratio target that is a primary determinant of financing behavior is influential in finance. Yet, how definitive is the evidence? We address this issue by generating samples where financing is unrelated to a firm's current debt ratio or a target. We find that much of the available evidence in favor of target behavior based on leverage ratio changes can be reproduced for these samples. Taken together, our findings suggest that a number of existing tests of target behavior have no power to reject alternatives.

U2 - 10.1111/j.1540-6261.2009.01479.x

DO - 10.1111/j.1540-6261.2009.01479.x

M3 - Journal article

VL - 64

SP - 1767

EP - 1796

JO - Journal of Finance

JF - Journal of Finance

SN - 0022-1082

IS - 4

ER -