Overpayment, Financial Distress, and Investor Horizons
Andriosopoulos, Dimitris and De Cesari, Amedeo and Stathopoulos, Konstantinos (2016) Overpayment, Financial Distress, and Investor Horizons. Preprint / Working Paper. Social Science Research Network, Glasgow. (http://ssrn.com/abstract=2728942)
Preview |
Text.
Filename: Andriosopoulos_De_Cesari_Stathopoulos_2016_Overpayment_financial_distress_and_investor_horizons.pdf
Final Published Version Download (1MB)| Preview |
Abstract
Firms that follow excessive payout policies (over-payers) have significantly higher financial distress risk and lower survival compared to under-payers, consistent with risk-shifting from shareholders to creditors in distressed firms. All else equal, the presence of institutional investors with long-term investment horizons in a firm is associated with overpayment. A transition analysis indicates the existence of a reciprocal relation between overpayment and financial distress, highlighting the feedback effects between overpayment and distress. In addition, over-payers endure smaller future sales and assets growth, and experience a significant future increase in the overall riskiness of their assets, compared to under-payers.
ORCID iDs
Andriosopoulos, Dimitris ORCID: https://orcid.org/0000-0003-3033-2308, De Cesari, Amedeo and Stathopoulos, Konstantinos;-
-
Item type: Monograph(Preprint / Working Paper) ID code: 57118 Dates: DateEvent12 January 2016PublishedSubjects: Social Sciences > Commerce > Accounting Department: Strathclyde Business School > Accounting and Finance Depositing user: Pure Administrator Date deposited: 26 Jul 2016 15:29 Last modified: 09 Oct 2024 00:11 URI: https://strathprints.strath.ac.uk/id/eprint/57118