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Is There an Optimal Industry Financial Structure? / Peter MacKay, Gordon M. Phillips.
- Format:
- Book
- Author/Creator:
- MacKay, Peter.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w9032.
- NBER working paper series no. w9032
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2002.
- Summary:
- We examine how intra-industry variation in financial structure relates to industry factors and whether real and financial decisions are jointly determined within competitive industries. We find that industry and group factors beyond standard industry fixed effects are also important to firm financial structure. Firm financial leverage, capital intensity, and cash-flow risk are interdependent decisions that depend on the firm's proximity to the median industry capital-labor ratio, the actions of firms within its industry quintile, and its status as entrant, incumbent, or exiting firm. Our results support competitive industry equilibrium models of financial structure in which debt, technology, and risk are simultaneous decisions.
- Notes:
- Print version record
- June 2002.
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