Title: The Interaction between Market Structure and Enterprises Capital Structure
Abstract: A new literature linking capital structure and factor-product markets has been under focus in the last few years.This literature relates some elements of the modern financial theory to market structure and firm's strategic behavior. Here, financial leverage changes the payoffst to equity and thus affects the equilibrium of product markets because financial instruments alter the ownership of residual cash flows and the ability of the firm to invest of to react in the market.These changes affect the beliefs and cxpectations a competitor forms about a firm's potential actions.And vise versa,foresighted firms will anticipate output market consequences of financial decisions;therefore,output market conditions will influence financial decisions.This shows a two-direction effect.Thus,our main concern is to measure empirically this relationshop.
Publication Year: 2006
Publication Date: 2006-01-01
Language: en
Type: article
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