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| Author: | Martin, R. |
| Title: | Debt financing and entry |
| Journal: | International Journal of Industrial Organization
2003 : APR, VOL. 21:4, p. 533-549 |
| Index terms: | Companies Capital Debt financing |
| Language: | eng |
| Abstract: | The primary objective of this paper is to show that debt financing reduces the commitment value of firm specific capital, which implies that excessive debt financing can make entry profitable. The authors show this by introducing debt financing within the context of a traditional model of entry deterrence. Canadian data from the years 1984-1996 is generally consistent with the implications of this paper. |
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