How Credit Market Conditions Impact the Effect of Voluntary Disclosure on Firms' Cost of Debt Capital

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dc.contributorOmer, Thomas C.
dc.creatorScott, Bret
dc.date.accessioned2014-11-03T19:49:15Z
dc.date.accessioned2017-04-07T20:01:32Z
dc.date.available2014-11-03T19:49:15Z
dc.date.available2017-04-07T20:01:32Z
dc.date.created2012-08
dc.date.issued2012-10-19
dc.description.abstractPrior literature finds that firms incur a lower cost of debt capital when they voluntarily disclose information. However, the economic literature demonstrates that creditors' lending standards become more stringent (lax) when credit is rationed (abundant) suggesting that they value voluntary disclosure from borrowers differentially across credit market regimes. I draw upon the economic and finance literature on credit rationing to test whether the effects of voluntary disclosure on firms' cost of debt capital is greater during periods of credit rationing. I provide some evidence that confirms this prediction. Moreover, I provide some evidence that this relation is stronger for smaller firms than larger firms during periods of credit rationing suggesting that creditors value voluntary disclosure more from firms that have fewer resources to cover the increased agency cost of lending during periods of credit rationing.
dc.identifier.urihttp://hdl.handle.net/1969.1/ETD-TAMU-2012-08-11862
dc.language.isoen_US
dc.subjectVoluntary Disclosure
dc.subjectCost of Debt Capital
dc.subjectCredit Rationing
dc.subjectFinancial Crisis
dc.titleHow Credit Market Conditions Impact the Effect of Voluntary Disclosure on Firms' Cost of Debt Capital
dc.typeThesis

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