Home > Research > Publications & Outputs > The relationship between ownership, financing d...
View graph of relations

The relationship between ownership, financing decisions and firm performance: a signaling model

Research output: Contribution to Journal/MagazineJournal articlepeer-review

<mark>Journal publication date</mark>08/1998
<mark>Journal</mark>International Economic Review
Issue number3
Number of pages22
Pages (from-to)723-744
Publication StatusPublished
<mark>Original language</mark>English


We develop a signaling model to show how adverse selection and moral
hazard interact to determine a firm's ownership structure and financing and
investment decisions endogenously. Testable implications are derived regarding
the relationship between insider ownership, performance measures such as
Tobin's Q ratio, and elements of financial structure such as the debt-equity