Capital Structure Choice: Evidence from Asset Downsizing Firms

THE DEPARTMENT OF ECONOMICS PRESENTS
Economics Colloquium Series

Dr. Tian (Lori) Tang: "Capital Structure Choice: Evidence from Asset Downsizing Firms"

Thursday, March 11, 2010, 3:30-5:00 P.M. Classroom S147

Abstract

Investigating the capital structure choice in asset downsizing firms between 1985 and 2006, we find that downsizing firms tend to significantly reduce their target leverage after the downsizing event, compared with expanding and non-downsizing control samples. Downsizing firms are also more likely to adjust faster toward their target leverage after downsizing due to sunk adjustment costs. I also find that downsizing firms’ debt versus equity issue and repurchase choices are not significantly affected by macroeconomic conditions. In other words, downsizing firms with significant changes in target leverage, are more eager to bring their leverage back towards their target leverage after downsizing regardless of macroeconomic conditions. Comparatively, expanding firms’ debt versus equity issue and repurchase choices are more dependent on overall macroeconomic conditions.

About Dr. Tang

Dr. Tian (Lori) Tang joined Department of Finance and Business Law in Craig School of Business as an Assistant Professor in 2008. Dr. Tang received her Ph.D. degree in Finance in 2008 from the University of Alabama. Dr. Tang’s research focuses on various topics in corporate finance area, including equity offerings, institutional investment, capital structure, mergers and acquisitions, corporate governance, and executive compensation. She has presented her papers at renowned national finance conferences, such as FMA, EFA, MFA and SFA. She has published several research papers on top finance journals including Financial Management and Journal of Corporate Finance. Her paper titled “Macroeconomic Conditions and Capital Structure Adjustment Speed” won the Best Paper Award of Corporate Finance at 2008 Midwest Finance Association annual meeting and also ranked among the Top Ten Most Downloaded Working Papers of the week in 2008 by Social Science Research Network.

Dr. Tang is also committed to teaching. She has taught classes at both undergraduate and graduate levels in investment, derivatives, financial management and international finance. She also serves as the Faculty Advisor of Financial Management Association Student Chapter and the Faculty Advisor of the Department of Finance and Business Law.

For more information contact Dr. Antonio Avalos (aavalos@csufresno.edu)

Related Terms

Comments

Calendar of Events

«  

May

  »
S M T W T F S
 
 
1
 
2
 
3
 
4
 
5
 
6
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
14
 
15
 
16
 
17
 
18
 
19
 
20
 
21
 
22
 
23
 
24
 
25
 
26
 
27
 
28
 
29
 
30
 
31
 
 
 
more
Add to calendar
FAIR USE NOTICE This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues vital to a democracy. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.