Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (43)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Kovenock, D.
Right arrow Articles by Phillips, G. M.
Right arrow Search for Related Content
Related Collections
Right arrow G31 - Capital Budgeting; Fixed Investment and Inventory Studies
Right arrow G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Right arrow G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Right arrow L22 - Firm Organization and Market Structure
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

Rev Fin 1997; 10:767-803
© 1997 the Society for Financial Studies

Article

Capital structure and product market behavior: an examination of plant exit and investment decisions.

D Kovenock and GM Phillipsz
Purdue University and the Tinbergen Institute
z Corresponding author at: College of Business, University of Maryland, College Park, MD 20742, USA

Abstract

We examine whether sharp debt increases through leveraged buyouts and recapitalizations interact with market structure to influence plant closing and investment decisions of recapitalizing firms and their rivals. We take into account the fact that recapitalizations and investment decisions are both endogenous and may be simultaneously influenced by the same exogenous events. Following their recapitalizations, firms in industries with high concentration are more likely to close plants and less likely to invest. Rival firms are less likely to close plants and more likely to invest when the market share of leveraged firms is higher.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 Ind Corp ChangeHome page
J. O'Brien and T. Folta
Sunk costs, uncertainty and market exit: A real options perspective
Ind. Corp. Change, October 1, 2009; 18(5): 807 - 833.
[Abstract] [Full Text] [PDF]

Home page
 REV FINANC STUDHome page
A. Ali, S. Klasa, and E. Yeung
The Limitations of Industry Concentration Measures Constructed with Compustat Data: Implications for Finance Research
Rev. Financ. Stud., October 1, 2009; 22(10): 3839 - 3871.
[Abstract] [Full Text] [PDF]

Home page
 REV FINANC STUDHome page
P. Pichler, A. Stomper, and C. Zulehner
Why Leverage Affects Pricing
Rev. Financ. Stud., July 1, 2008; 21(4): 1733 - 1765.
[Abstract] [Full Text] [PDF]

Home page
 Ind Corp ChangeHome page
K. Coucke, E. Pennings, and L. Sleuwaegen
Employee layoff under different modes of restructuring: exit, downsizing or relocation
Ind. Corp. Change, April 29, 2007; (2007) dtm002v1.
[Abstract] [Full Text] [PDF]

Home page
 REV FINANC STUDHome page
P. MacKay and G. M. Phillips
How Does Industry Affect Firm Financial Structure?
Rev. Financ. Stud., December 1, 2005; 18(4): 1433 - 1466.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.