search query: @author Brander, J.A. / total: 3
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| Author: | Brander, J.A. Lewis, T.R. |
| Title: | Oligopoly and financial structure: the limited liability effect |
| Journal: | American Economic Review
1986 : DEC, VOL. 76:5, p.956-970 |
| Index terms: | OLIGOPOLY MONEY MARKETS |
| Language: | eng |
| Abstract: | It is argued that product markets and financial markets have important linkages. Assuming an oligopoly in which financial and output decisions follow in sequence,it is shown that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will have incentives to use financial structure to influence the output market,this demonstrates a new determinant of the debt-equity ratio. The basic model is a two-stage sequential duopoly game. Concluding remarks and extensions are also discussed. |
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