경영자과신과 전환사채발행

초록

Convertible bonds, a type of mezzanine debt that combines the characteristics of equity securities and bonds, have been used to facilitate corporate financing. However, they have the potential for governance and investor abuse and have recently come under regulatory scrutiny. This study examines which firm characteristics increase the likelihood of issuing convertible bonds by testing managerial overconfidence. We revealed the following empirical results using a sample of 12,440 firm-years, including 1,755 firm-years of convertible bond issuances over the six years from 2017 to 2022. First, managerial overconfidence has a significant positive relationship with convertible bond issuance, and this effect is robust to the presence of refixing or third-party call option provisions. Second, for the impact of the 2020 and 2021 regulations, we find that the relationship between managerial overconfidence and convertible bonds weakens only for issuance frequency and has no significant incremental effect on the issuance dummies. Third, considering firms with characteristics that motivate issuance, we observe a significant incremental effect only on issuance frequency. Test results suggest that the likelihood of issuing convertible bonds increases when managers are optimistic about their business and that regulation partially affects the behavior of overconfident managers.

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