RT Journal Article
T1 The strategic behavior of firms with debt
A1 Reboul, Jérôme
A1 Toldrà, Anna
AB We empirically study the strategic behavior of levered firms in competitive and noncompetitive environments. We find that regulation induces firms to increase leverage, and this reduces their ability to compete when deregulation occurs. Large and small levered firms adopt different strategies upon deregulation. Whereas more levered small firms charge higher prices to increase margins at the expense of market shares, highly levered large firms prey on their rivals by increasing output and reducing prices to increase their market shares. The difference in their behavior is due to differences in their probability of bankruptcy and their financing constraints.
PB Cambridge University Press
SN 0022-1090
YR 2016
FD 2016-11-01
LK https://hdl.handle.net/10016/34593
UL https://hdl.handle.net/10016/34593
LA eng
NO Toldrà-Simats thanks the Spanish Ministerio de Ciencia y Tecnologia for the financial supportreceived (Grant ECO2012-36559) and Fundaci´on Ramon Areces for the research funding (Grant2015/00442/001).
DS e-Archivo
RD 1 sept. 2024