Customer-Supplier Relationships and the Cost of Debt

We examine the relation between the existence of a large customer and the cost of debt financing. We find that credit ratings are lower for firms with a large customer. We also find that yield spreads are higher for firms with a large customer. The results indicate that firms having a large customer have higher cost of debt financing, which is consistent with our capital structure hypothesis

The Effects of Capital Infusions after IPO on Diversification and Cash Holdings

This paper examines how the number and the timing of capital infusions after the IPO affect the firm’s diversification decision and the firm’s level of cash-holdings. We find that the frequent capital infusions ultimately affect the firm’s liquidity management policy, resulting in holding less cash consistent with the behavior life-cycle hypothesis. At the same time, the hurried external financings after the IPO influence managers to be more conservative in management, resulting in a high propensity for the firm’s diversification and a relatively high level of firm’s cash holdings