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Authors: Jian Ma and Zhixin Liu

Affiliation: BeiHang University, China

ISBN: 978-989-8425-56-0

Keyword(s): Investor-Manager, Heterogeneous belief, Financing decision.

Related Ontology Subjects/Areas/Topics: e-Business ; Enterprise Engineering ; Enterprise Information Systems

Abstract: This paper considers a firm that may issue common stock or debt to undertake an investment opportunity when the investors and the manager have different estimates of the expected return from the investment. Firstly, an equilibrium model is developed to reveal the impact of investor-manager heterogeneous beliefs on corporate financing decision, and the model concludes that the greater the investors’ belief relative to the manager, the more likely the firm is to choose to issue equity rather than debt. Secondly, using a sample of debt and seasoned equity issues from Chinese listed firms we empirically analyze the conclusion above. We find empirical results support for the conclusion.

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Paper citation in several formats:
Ma, J. and Liu, Z. (2011). INVESTOR-MANAGER HETEROGENEOUS BELIEFS AND CORPORATE FINANCING DECISION .In Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 3: ICEIS, ISBN 978-989-8425-56-0, pages 384-388. DOI: 10.5220/0003434203840388

@conference{iceis11,
author={Jian Ma. and Zhixin Liu.},
title={INVESTOR-MANAGER HETEROGENEOUS BELIEFS AND CORPORATE FINANCING DECISION },
booktitle={Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 3: ICEIS,},
year={2011},
pages={384-388},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0003434203840388},
isbn={978-989-8425-56-0},
}

TY - CONF

JO - Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 3: ICEIS,
TI - INVESTOR-MANAGER HETEROGENEOUS BELIEFS AND CORPORATE FINANCING DECISION
SN - 978-989-8425-56-0
AU - Ma, J.
AU - Liu, Z.
PY - 2011
SP - 384
EP - 388
DO - 10.5220/0003434203840388

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