Corporate International Activity and Debt Financing

Journal of International Business Studies, Vol. 33, No. 1, 2002

28 Pages Posted: 4 Oct 2001 Last revised: 21 Apr 2014

Sattar Mansi

Virginia Tech

David M. Reeb

National University of Singapore

Date Written: June 18, 2001

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 international activity 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 associated with a 13% reduction in the cost of debt and a 30% increase in the level of debt financing.

Keywords: Firm Internationalization, Debt Financing

JEL Classification: G3

Suggested Citation

Mansi, Sattar and Reeb, David M., Corporate International Activity and Debt Financing (June 18, 2001). Journal of International Business Studies, Vol. 33, No. 1, 2002. Available at SSRN: https://ssrn.com/abstract=285984 or http://dx.doi.org/10.2139/ssrn.285984

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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