دانلود رایگان مقاله انگلیسی عدم تقارن اطلاعات و تأثیر تخصیص بودجه در بازار اوراق قرضه - الزویر 2019

ABSTRACT

We examine the effect of an exogenous increase in information asymmetry (as proxied by late filings of firms' Form 10-K) on bond prices. We find that bondholders react negatively to a late filing announcement but this negative reaction is conditional on whether late filing firms appropriate wealth from bondholders through shareholder distribution. Moreover, we find that the impact of financial distress and covenants on bond values is mainly driven by the wealth appropriation from bondholders. The results are robust to difference-in-difference analysis using treatment (i.e., late filing) and control (i.e., non-late-filing) samples based on propensity score matching. The results provide evidence that shareholder distribution as a specific form of wealth appropriation from bondholders to shareholders has a significant effect on bond values when financial information is not timely provided to capital markets.

Conclusion

Motivated by the importance of timely disclosure of financial information in reducing information asymmetry in capital markets and by the limited research on the consequences of filing late financial statements with the SEC in the bond market, we examine the effect of firm's non-timely disclosure of financial information on bond values. We document that bondholders react negatively to the information asymmetry caused by late disclosures but this negative reaction is conditional on whether late filing firms appropriate wealth from bondholders through dividend payouts. Furthermore, we document that this act of wealth appropriation from bondholders to shareholders drives the impact of financial distress and covenants on bond values. Our evidence suggests that when financial information is not timely provided to the capital markets, the wealth appropriation from bondholders has an important first-order effect on bond values. Overall, our results suggest that the value of debt is more sensitive to information asymmetry conditional on having wealth appropriation from bondholders and, therefore, enhance our understanding of the causal effect of information asymmetry on bond values. Our study contributes to the existing literature in two ways. First, our study provides new evidence on the relation between information asymmetry caused by late disclosures of financial information and bond values. Second, our study contributes to the growing literature on the consequences of late SEC filings and show that bond investors, who are mainly institutional investors with access to various sources of information, react negatively to late disclosures of financial information conditional on having a wealth appropriation from bondholders to shareholders.