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The relationship between ownership, financing decisions and firm performance:a signaling model

Bajaj, Mukesh and Chan, Yuk-Shee and Dasgupta, Sudipto (1998) The relationship between ownership, financing decisions and firm performance:a signaling model. International Economic Review, 39 (3). pp. 723-744. ISSN 0020-6598

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Abstract

We develop a signaling model to show how adverse selection and moral hazard interact to determine a firm's ownership structure and financing and investment decisions endogenously. Testable implications are derived regarding the relationship between insider ownership, performance measures such as Tobin's Q ratio, and elements of financial structure such as the debt-equity ratio.

Item Type: Article
Journal or Publication Title: International Economic Review
Subjects:
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 74567
Deposited By: ep_importer_pure
Deposited On: 08 Jul 2015 00:02
Refereed?: Yes
Published?: Published
Last Modified: 18 Nov 2017 12:50
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/74567

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