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| Author: | Kale, J.R. Shahrur, H. |
| Title: | Corporate capital structure and the characteristics of suppliers and customers |
| Journal: | Journal of Financial Economics
2007 : FEB, VOL. 83:2, p. 321-365 |
| Index terms: | capital structure of companies investments contracts markets buying customers suppliers |
| Freeterms: | leverage |
| Language: | eng |
| Abstract: | This paper investigates the link btw. a firm's leverage (here as: lev.) and the characteristics of its suppliers and customers (as: spl-and-ct./spls-and-cts). It is especially examined whether firms use decreased lev. as commitment mechanism to induce spls./cts. to undertake relationship-specific investments. It is found that the firm's lev. is negatively related to the R&D intensities of its spls-and-cts. There is also found lower debt levels for firms operating in industries with more prevalent strategic alliances and joint ventures with firms in spl-and-cts. industries. |
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