Essays on the Impact of Non-Financial Stakeholders on Firms’ Financing Policies

Loading...
Thumbnail Image
Date
2011-04-18T18:28:49Z
Authors
Wang, Jin
Keyword
Non-Financial Stakeholder , Financing Policy
Abstract
In this thesis we investigate whether firms’ relationships with non-financial stakeholders affect their financing policies. We find that the firms that place a higher value on reputation for treating employees generously maintain lower debt ratios. Furthermore, we find that the firms whose business relies on major customer-supplier relationships adopt more flexible payout policies because of relationship-specific investments. Finally, we find that the high financial distress costs rather than the hold-up problem associated with relationship-specific investments affect firms’ financing policies. Overall, our results suggest that firms’ relationships with non-financial stakeholders are important determinants of their financing policies.
External DOI