Optimal capital structure and industry dynamics

• 成果类型: Article
• 署名作者: Miao, JJ
• 署名单位: Boston University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2005.00812.x
• 发表日期: 2005
• 页码: 2621-2659
• 关键词: CORPORATE-DEBT; AGENCY COSTS; EXIT; INVESTMENT; entry; decisions; determinants; equilibrium; bankruptcy; selection

摘要

This paper provides a competitive equilibrium model of capital structure and industry dynamics. In the model, firms make financing, investment, entry, and exit decisions subject to idiosyncratic technology shocks. The capital structure choice reflects the tradeoff between the tax benefits of debt and the associated bankruptcy and agency costs. The interaction between financing and production decisions influences the stationary distribution of firms and their survival probabilities. The analysis demonstrates that the equilibrium output price has an important feedback effect. This effect has a number of testable implications. For example, high growth industries have relatively lower leverage and turnover rates.