TY - JOUR
T1 - An empirical test of agency cost reduction using interest rate swaps
AU - Harper, Joel T.
AU - Wingender, John R.
N1 - Copyright:
Copyright 2016 Elsevier B.V., All rights reserved.
PY - 2000/9
Y1 - 2000/9
N2 - This paper tests a model based on Wall's (Wall, L., 1989. Journal of Banking and Finance 13, 261-270) hypothesis of agency cost reduction using interest rate swaps. We find a significant positive relationship between the risk of the firm and the reduction of agency costs measured by the continuously compounded excess return (CAR) of the firm. Our findings are consistent with Wall's hypothesis and other theories of swap transactions and in explaining the existence and growth of the swap market.
AB - This paper tests a model based on Wall's (Wall, L., 1989. Journal of Banking and Finance 13, 261-270) hypothesis of agency cost reduction using interest rate swaps. We find a significant positive relationship between the risk of the firm and the reduction of agency costs measured by the continuously compounded excess return (CAR) of the firm. Our findings are consistent with Wall's hypothesis and other theories of swap transactions and in explaining the existence and growth of the swap market.
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U2 - 10.1016/S0378-4266(99)00098-9
DO - 10.1016/S0378-4266(99)00098-9
M3 - Article
AN - SCOPUS:0038127680
SN - 0378-4266
VL - 24
SP - 1419
EP - 1431
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 9
ER -