Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/189684
Authors: 
Boneva, Lena
Linton, Oliver Bruce
Year of Publication: 
2017
Series/Report no.: 
cemmap working paper No. CWP02/17
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
Abstract: 
What is the effect of funding costs on the conditional probability of issuing a corporate bond? We study this question in a novel dataset covering 5610 issuances by US firms over the period from 1990 to 2014. Identification of this effect is complicated because of unobserved, common shocks such as the global financial crisis. To account for these shocks, we extend the common correlated effects estimator to settings where outcomes are discrete. Both the asymptotic properties and the small sample behavior of this estimator are documented. We find that for non-financial firms, yields are negatively related to bond issuance but that effect is larger in the pre-crisis period.
Subjects: 
Heterogeneous panel data
discrete choice models
capital structure
JEL: 
C23
C25
G32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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