Anticompetitive financial contracting: The design of financial claims

• 成果类型: Article
• 署名作者: Cestone, G; White, L
• 署名单位: Harvard University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00599
• 发表日期: 2003
• 页码: 2109-2141
• 关键词: initial public offerings; convertible securities; asymmetric information; Market competition; empirical-analysis; limited-liability; capital structure; Product markets; INVESTMENT; MODEL

摘要

This paper presents the first model where entry deterrence takes place through financial rather than product-market channels. In existing models, a firm's choice of financial instruments deters entry by affecting product market behavior; here entry deterrence occurs by affecting the credit market behavior of investors towards entrant firms. We find that to deter entry, the claims held on incumbent firms should be sufficiently risky, that is, equity. This contrasts with the standard Brander and Lewis (1986) result that debt deters entry. This effect is more marked the less competitive the credit market is-so more credit market competition spurs more product market competition.