We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Proprietary information and the choice between public and private debt.
- Authors
Bae, Kee‐Hong; Dai, Yunhao; Tan, Weiqiang; Wang, Wenming
- Abstract
The high costs of disclosing confidential information lead firms with proprietary information to prefer private debt (bank loan) to public debt (corporate bond). We provide empirical evidence supporting this proposition using the staggered adoption of the inevitable disclosure doctrine (IDD) by US state courts that exogenously increased the value of proprietary information. The focal firms are significantly less likely to issue bonds after the IDD adoption. Financing through public debt decreases more for firms in which the protection of proprietary information is relatively more important.
- Subjects
PUBLIC debts; PUBLIC finance; BONDS (Finance); BANK loans; CORPORATE bonds; STATE courts; LEGAL evidence; VOLCKER Rule (U.S.)
- Publication
Accounting & Finance, 2024, Vol 64, Issue 2, p1693
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.13197