My main results are consistent with the joint hypotheses that information asymmetries
between rural firms and investors seem to be large, and that firms appear to avoid issuing equity in the presence of these asymmetries.
Other measures of information asymmetries
, such as analyst forecast errors and market-to-book, are not related to adverse selection.
The extent to which this market will play a more central role in financing new ventures will depend highly on the crowdfunding platforms' capacity to attract enough project owners and contributors, and to address information asymmetries
We provide evidence that secondary market information asymmetries
are 1 reduced and secondary market liquidity is enhanced through analyst coverage generated by the initial returns.
Inspired by his close friend's near-death experience and being a seasoned player in the healthcare industry, Beh pledged to do something to address the inefficiencies and information asymmetries
Since growth opportunities are so much harder to value than assets in place, firms with substantial value in growth opportunities are likely to have greater information asymmetries
Finally, we use regression analysis to control for other factors and compare the effects of information asymmetries
on changes in performance for debt and equity issuers.
1) Information asymmetries
exist before debt issuance and extend through repayment, creating adverse selection and moral hazard problems that raise the interest rates charged by lenders.
First, because small firms are generally associated with greater information asymmetries
, the negative coefficient is consistent with the hypothesis that greater asymmetric information increases the investment-cash flow sensitivities of small firms.
This eliminates information asymmetries
and mitigates risk of lending by multi-lateral checking, balancing and supervision.
No one seriously disputes the need for some form of professional regulation in the presence of large information asymmetries
and serious spillover effects.
Market imperfections, as well as information asymmetries
and agency costs can lead to negative NPV projects being carried out (overinvestment) and to the rejecting of positive NPV projects (underinvestment).