Reconciling divergent findings on the speed of leverage adjustment
Estimates of firms’ speeds of leverage adjustment (SOAs) vary wildly. Studies producing these estimates impose a strong constraint: An average SOAis estimated for all firms in a sample. Using finite mixture models (FMM) we uncover four distinct types of behaviors characteri...
| Main Authors: | , , |
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| Format: | Conference Paper |
| Published: |
2018
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| Online Access: | http://hdl.handle.net/20.500.11937/77317 |
| _version_ | 1848763837512155136 |
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| author | Khoo, Joye Durand, Robert B. Harris, Mark N. |
| author_facet | Khoo, Joye Durand, Robert B. Harris, Mark N. |
| author_sort | Khoo, Joye |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Estimates of firms’ speeds of leverage adjustment (SOAs) vary wildly. Studies producing these estimates impose a strong constraint: An average SOAis estimated for all firms in a sample. Using finite mixture models (FMM) we uncover four distinct types of behaviors characterizing SOAs. The four behaviors in this regard can be classified as: Nearly stable (SOA= 2%); slower adjusters(SOA= 28%);faster adjusters(SOA= 62%) and drifters (SOA= -3%) who slowly move away from estimated leverage targets. |
| first_indexed | 2025-11-14T11:09:48Z |
| format | Conference Paper |
| id | curtin-20.500.11937-77317 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:09:48Z |
| publishDate | 2018 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-773172020-05-06T07:05:40Z Reconciling divergent findings on the speed of leverage adjustment Khoo, Joye Durand, Robert B. Harris, Mark N. Estimates of firms’ speeds of leverage adjustment (SOAs) vary wildly. Studies producing these estimates impose a strong constraint: An average SOAis estimated for all firms in a sample. Using finite mixture models (FMM) we uncover four distinct types of behaviors characterizing SOAs. The four behaviors in this regard can be classified as: Nearly stable (SOA= 2%); slower adjusters(SOA= 28%);faster adjusters(SOA= 62%) and drifters (SOA= -3%) who slowly move away from estimated leverage targets. 2018 Conference Paper http://hdl.handle.net/20.500.11937/77317 restricted |
| spellingShingle | Khoo, Joye Durand, Robert B. Harris, Mark N. Reconciling divergent findings on the speed of leverage adjustment |
| title | Reconciling divergent findings on the speed of leverage adjustment |
| title_full | Reconciling divergent findings on the speed of leverage adjustment |
| title_fullStr | Reconciling divergent findings on the speed of leverage adjustment |
| title_full_unstemmed | Reconciling divergent findings on the speed of leverage adjustment |
| title_short | Reconciling divergent findings on the speed of leverage adjustment |
| title_sort | reconciling divergent findings on the speed of leverage adjustment |
| url | http://hdl.handle.net/20.500.11937/77317 |