Corporate International Activity and Debt Financing

19 Pages Posted: 25 Apr 2011

See all articles by Sattar Mansi

Sattar Mansi

Virginia Polytechnic Institute & State University

David M. Reeb

National University of Singapore

Multiple version iconThere are 2 versions of this paper

Date Written: March 2002

Abstract

The literature provides conflicting evidence on the relation between corporate international activity and the cost and level of debt financing. Based on this evidence, we explore the impact of firm internationalization on debt financing. Using a market based sample of U.S. firms, we find significant evidence of a non monotonic relation between firm international activity and both the cost and level of debt financing. Specifically, we find that, contrary to prior research, firm international activity is, on average, associated with a 13% reduction in the cost of debt financing and a 30% increase in firm leverage.© 2002 JIBS. Journal of International Business Studies (2002) 33, 129–147

Suggested Citation

Mansi, Sattar and Reeb, David M., Corporate International Activity and Debt Financing (March 2002). Journal of International Business Studies, Vol. 33, Issue 1, pp. 129-147, 2002. Available at SSRN: https://ssrn.com/abstract=1818781 or http://dx.doi.org/10.1057/palgrave.jibs.8491008

Sattar Mansi (Contact Author)

Virginia Polytechnic Institute & State University ( email )

David M. Reeb

National University of Singapore ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

HOME PAGE: http://www.davidreeb.net

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