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Author : Carl O'Donnell
Publisher :
ISBN 13 :
Total Pages : 149 pages
Book Rating : 4.:/5 (65 download)
Download or read book The Interaction of Capital Structure and Product-market Behaviour written by Carl O'Donnell and published by . This book was released on 2003 with total page 149 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Daniel J. Kovenock
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (535 download)
Download or read book Capital Structure and Product Market Behavior written by Daniel J. Kovenock and published by . This book was released on 1995 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Judith A. Chevalier
Publisher :
ISBN 13 :
Total Pages : 6 pages
Book Rating : 4.:/5 (6 download)
Download or read book Capital Structure and Product-market Behavior written by Judith A. Chevalier and published by . This book was released on 1995 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Yongqiang Chu
Publisher :
ISBN 13 :
Total Pages : 39 pages
Book Rating : 4.:/5 (129 download)
Download or read book Optimal Capital Structure, Capacity Choice and Product Market Competition written by Yongqiang Chu and published by . This book was released on 2010 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a dynamic trade-off model to study the interaction between product market competition and capital structure. Firms make interdependent entry, investment, financing and default decisions. Trade-off between tax benefits, bankruptcy costs and strategic considerations in the product market determines optimal capital structure. The model delivers the following results that are consistent with empirical evidences: (1) Firms may have non-linear and non-monotonic reactions to their competitors' change of leverage, depending on their original levels of leverage; (2) The within-industry variation of leverage can be large, because incumbents and entrants use leverage strategically differently; (3) Entrants have higher leverage than incumbents in equilibrium, because the incumbents use lower leverage to gain strategic advantages over the entrants.
Author : David J. Smith
Publisher :
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (129 download)
Download or read book The Relationship between Capital Structure and Product Markets written by David J. Smith and published by . This book was released on 2012 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate whether the capital structure of New Zealand firms influences their product-market performance in the period from 1984 to 2008. Our main findings are that the use of leverage by publicly listed New Zealand companies leads to an increase in relative-to-industry sales growth, but a decrease in relative-to-industry return on assets (ROA). We also conduct a reverse causality test by examining whether sales growth and ROA influence leverage. We find no evidence that sales growth has an impact on the use of debt, but significant evidence that ROA is negatively correlated with its use. Our results suggest that New Zealand firms use debt to compete more aggressively in their product markets, even though this strategy comes at a cost of lower relative-to-industry profitability. A possible explanation for this behaviour is the more competitive trading environment that has developed in New Zealand over the last 25 years.
Author : Dan Kovenock
Publisher :
ISBN 13 :
Total Pages : 28 pages
Book Rating : 4.:/5 (691 download)
Download or read book Capital Structure and Product Market Behavior written by Dan Kovenock and published by . This book was released on 1995 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Ernesto Santiago Schargrodsky
Publisher :
ISBN 13 :
Total Pages : 224 pages
Book Rating : 4.:/5 (413 download)
Download or read book Product Market Competition, Ownership Structure and Capital Structure written by Ernesto Santiago Schargrodsky and published by . This book was released on 1997 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Murillo Campello
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (129 download)
Download or read book Capital Structure and Product Markets Interactions written by Murillo Campello and published by . This book was released on 2002 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides firm- and industry-level evidence on the effects of capital structure on product market outcomes for a large cross-section of industries. The analysis uses shocks to aggregate demand as surrogates for exogenous changes in the product market environment, dealing with concerns about the endogenous nature of the relation between financial structure and competitive performance. I find that debt financing has a negative impact on firm (relative-to-industry) sales growth in industries where rivals are relatively unlevered during recessions, but not during booms. In contrast, no such effects are observed for firms competing in high-debt industries. At the industry level, I find that markups are more countercyclical when industry debt is high. The cyclical dynamics I find for firm sales growth and for industry markups are consistent with Chevalier and Scharfstein's (1996) prediction that firms that rely more heavily on external financing are more prone to boost short-term profits at the expense of future sales in response to negative shocks to demand, and that the competitive outcomes resulting from such actions depend on the financial structures of their industry rivals.
Author : A. Michael Spence
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (133 download)
Download or read book Capital Structure and the Corporations's Product Market Environment written by A. Michael Spence and published by . This book was released on 1983 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Lee Greer
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (518 download)
Download or read book The Link Between Capital Structure and Product Market Competition written by Lee Greer and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The relationship between capital structure and product market competition is examined using a theoretical model and two econometric analyses. In an extension of Glazer (1994), a theoretical model is derived that allows a quantity leader and follower to issue debt and then twice play a sequential product market game, after which each firm must either repay its debt in full or go bankrupt. It is demonstrated that the follower maximizes operating profit irrespective of capital structure but that the levered quantity leader in every period produces more than the Stackelberg profit-maximizing level of output. As such, the industry characterized by a financially levered leader and follower is more competitive than it otherwise would be. Simultaneous equations models consisting of a demand and supply relation are used to analyze monthly data from the domestic steel industry so as to test whether the industry's increased reliance on debt finance over the period 1958 to 1981 affected competition in the market for steel. The supply relation, which follows from the assumption that firms simultaneously select output in order to maximize profit, is augmented with a sales-weighted debt to market value ratio. Two-stage least squares (2SLS), weighted two-stage least squares (W2SLS), and iterative weighted three-stage least squares (IW3SLS) regressions are estimated. Results from all regressions show a statistically significant and positive relationship between the sales-weighted debt-value ratio and the price of steel, which suggests that increased debt finance served to reduce competition in the domestic steel industry over the sample period. In light of the fact that U.S. Steel's market share over the sample period was significantly higher and less volatile than that of any other integrated producer, the second econometric model tests the null hypothesis of quantity leadership, using insights from the theoretical model. Two supply relations, one for the leader and one for the follower, are derived and estimated. To account for the possibly endogenous decision on the part of U.S. Steel to issue debt, a binomial probit is estimated and its fitted probabilities are included as a predetermined variable in the leader's supply relation. Results show that one must reject the null hypothesis of quantity leadership and that U.S. Steel's decision to issue debt had a positive but statistically insignificant effect on the composite steel price.
Author : Michael Spence
Publisher :
ISBN 13 :
Total Pages : 28 pages
Book Rating : 4.:/5 (255 download)
Download or read book Capital Structure and the Corporation's Product Market Environment written by Michael Spence and published by . This book was released on 1983 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Chong-en Bai
Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (513 download)
Download or read book Capital Structure and Product Market Strategy written by Chong-en Bai and published by . This book was released on 1994 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Interaction of Capital Structure and Ownership Structure written by and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Abdulaziz Istaitieh
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.:/5 (129 download)
Download or read book Firm's Capital Structure and Factor-Product Markets written by Abdulaziz Istaitieh and published by . This book was released on 2003 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this work is to offer a theoretical overview of the literature that links capital structure and factor-product markets, in order to show what we do know about these connections. This literature relates some elements of the modern financial theory to the stakeholder theory, industrial organization, and firm's strategic management. Three main points could be highlighted. First, the relevant role of non-financial stakeholders in capital structure design. Second, the interactions existing between capital structure and market structure. Third, the two-direction effect between the firm's capital structure and its strategic behavior in product markets.
Author : Hae Won (Henny) Jung
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (13 download)
Download or read book Capital Structure Under Imperfect Product Market Competition written by Hae Won (Henny) Jung and published by . This book was released on 2018 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show how product market competition affects capital structure by developing a tractable model that embeds the tradeoff between the tax benefits and bankruptcy costs of debt in an industry equilibrium setting with heterogeneous, imperfectly competitive firms. Different determinants of competition--fixed production costs and product substitutability--have contrasting implications for the effects of competition on firm leverage. Firms in more competitive industries with greater product substitutability are more leveraged, whereas firms in more competitive industries with lower fixed production costs have lower leverage. We show robust support for our predictions in our empirical analysis of U.S. nonfinancial firms.
Author : Matthew Jon Clayton
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (363 download)
Download or read book On the Interaction of Capital Structure and Competitive Decisions written by Matthew Jon Clayton and published by . This book was released on 1996 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : I. M. Pandey
Publisher :
ISBN 13 :
Total Pages : 22 pages
Book Rating : 4.:/5 (129 download)
Download or read book Capital Structure and Market Power Interaction written by I. M. Pandey and published by . This book was released on 2002 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides new insights on the way in which the capital structure and market power and capital structure and profitability are related. We predict and show that capital structure and market power, as measured by Tobin's Q, have a cubic relationship. That is, at lower and higher ranges of Tobin's Q, firms employ higher debt, and reduce their debt at intermediate range. This is due to the complex interaction of the market conditions, agency problems and bankruptcy costs. We also show saucer-shaped relation between capital structure and profitability because of the interplay of agency costs, costs of external financing and debt tax shield. To our knowledge, we are the first to uncover these results.
