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Debt and firms' relationships: the Italian evidence

journal contribution
posted on 30.05.2006, 10:09 by Claudio Piga
Theories that predict the strategic use of debt by players engaged in a vertical relationship are tested using an empirical model of debt usage. It is found that firms selling mainly to other firms are characterised on average by a higher level of debt. No evidence supports the notion that buyers increase their leverage to commit themselves not to behave opportunistically towards their suppliers. The results in the paper also suggest that group organisation limits the incentive to use debt strategically within the holding-subsidiaries relationship.

History

School

  • Business and Economics

Department

  • Economics

Pages

97143 bytes

Citation

PIGA, C., 2002. Debt and firms' relationships: the Italian evidence. Review of Industrial Organization, 20, pp.267-282.

Publisher

© Kluwer (Springer)

Publication date

2002

Notes

This is Restricted Access. This article was published in the journal, Review of Industrial Organization [© Springer] and is available at: http://www.springerlink.com/openurl.asp?genre=journal&issn=0889-938X.

ISSN

0889-938X

Language

en

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Keywords

Exports