Do temporary changes in earnings caused by mean reversion affect firms’ refinancing decisions?
构建动态两阶段权衡模型，发现收益均值回归导致的暂时性盈利变化会影响企业再融资时的杠杆决策，实证表明不同税盾激励强度的企业反应不同。
Abstract We develop a dynamic two‐stage trade‐off model with refinancing when earnings are mean reverting. Our model predicts a negative relation between profitability and leverage at refinancing due to conservative debt increases. With multiple rounds of refinancing, the leverage–profitability relation may turn positive when firms have substantial debt tax shields. Our empirical analysis of US firms reveals that firms with moderate incentives to shield tax benefits with debt internalize the temporary increase in earnings caused by mean reversion at refinancing. However, firms with strong incentives to shield tax benefits take on excessive debt despite the temporary increases in profitability.