재무연구 제 권 호 (2017년 5월)
Asian Review of Financial Research, Vol., No..
pp.599~641
pp.599~641
Financing Strategically : The Moderation Effect of Marketing Activities on the Bifurcated Relationship between Debt Level and Valuation of Small and Medium Enterprises
Sang-Joon Kim Assistant Professor Ewha School of Business Ewha Womans University
Jong-Wan Bae Assistant Professor of Finance Martha & Spencer Love School of Business Elon University 100 Campus Drive, Elon, NC 27244
Hannah Oh Assistant Professor Department of Marketing, College of Business Administration University of Nebraska at Omaha Omaha, NE 68182
In this study, we explore a condition where corporate debt can be strategically used in the stock market by governing its interpretations from investors. To disentangle the performance implications of corporate debt, we pay attention to the signaling aspect of debt financing. Acknowledging that investors can interpret the value of a firm with the level of debt, we postulate that debt can convey differentiated signals (i.e. driver vs. distress). In addition, we argue that the bifurcated role of debt can be moderated by marketing activities, which can affect the stakeholders’ interpretations. This idea is empirically examined in a population of SMEs (Small- and Medium-sized Enterprises). Using COMPUSTAT database of 2,174 U.S. public firms ranging from 1982 to 2010, we find resource-independent debt (called idiosyncratic debt) has bifurcated impacts on Buy-and-Hold Abnormal Returns (BHARs) and the marketing moderation of such relationship is also bifurcated.
Sang-Joon Kim
Jong-Wan Bae
Hannah Oh
In this study, we explore a condition where corporate debt can be strategically used in the stock market by governing its interpretations from investors. To disentangle the performance implications of corporate debt, we pay attention to the signaling aspect of debt financing. Acknowledging that investors can interpret the value of a firm with the level of debt, we postulate that debt can convey differentiated signals (i.e. driver vs. distress). In addition, we argue that the bifurcated role of debt can be moderated by marketing activities, which can affect the stakeholders’ interpretations. This idea is empirically examined in a population of SMEs (Small- and Medium-sized Enterprises). Using COMPUSTAT database of 2,174 U.S. public firms ranging from 1982 to 2010, we find resource-independent debt (called idiosyncratic debt) has bifurcated impacts on Buy-and-Hold Abnormal Returns (BHARs) and the marketing moderation of such relationship is also bifurcated.
