of International Trade and Finance, Fu Jen Catholic University Department of Finance, National Taiwan University
Abstract:
Among the first studies, this research explores the relation between information asymmetry, supply chain characteristics of firms and bond yield spreads by employing American data from 2001 to 2006. Empirical results of this study show that suppliers’ information asymmetry play an important role in explaining bond yield spreads when controlling for variables well-known in the literature. The results of this research also found that the positive relation between a firm’s bond yield spreads and its suppliers’ industry concentration becomes weaker when suppliers have higher degree of information asymmetry. Additionally, the negative relation between a firm’s bond yield spreads and its customers’ R&D intensity becomes weaker when customers have higher degree of information asymmetry. The above results are robust even when additionally controlling for credit ratings.
