Brander and Lewis argue in a seminal paper (AER, 1986) that a Þrm’s debt-equity ratio should have important strategic effects on product market competition. We test their model in a duopoly experiment under both, Bertrand and Cournot competition. We Þnd that leverage has strategic effects, but those effects are much weaker than predicted by theory. SpeciÞcally, we Þnd for price competition a ge...

We examine the effect of direct mail (commonly referred to as junk mail) advertising on individual financial decisions by studying consumer choice of home equity debt contracts. Consistent with the theoretical predictions, we find that financial variables underlying the relative pricing of debt contracts are the leading factors explaining consumers’ home equity debt choice. Furthermore, we also...

The purpose of this research is to examine the firm value multi-finance companies listed on Indonesia Stock Exchange. focuses two variables, namely financial ratios which include current ratio, return assets, equity, and debt equity as well economic added (EVA). hypothesis states that both variables have an impact value. In study, sample selection was done using a quantitative approach through ...

ABSTRAK
 Informasi tentang Cash Rasio, Total Debt to Equity Ratio dan Return on Asset jika dilihat dengan signaling theory agency maka akan memberikan sinyal bagi agen prinsipal dalam memprediksi Kesulitan Keuangan Perusahaan. Penelitian ini bertujuan untuk menguji pengaruh terhadap financial distress pada industri property and real estate yang listing di Bursa Efek Asia Tenggara periode 2...

We find over 30% of public U.S. non-financial companies have negative net-financial-obligation (NFO) during the sample period of 1965 to 2014. According to the modified DuPont analysis, NFO is defined as total debt minus excess cash and passive investments. The persistence of negative-NFO observations suggests that its occurrence is not random, raising the questions of why these firms hold such...

We estimate the sensitivity of investment to the cost of outside equity for young firms. For estimation, we exploit differences across firms in eligibility to a new tax relief program for individual outside investors in the UK. On average, investment increases 1.5% in response to a 10% drop in the cost of outside equity. This average conceals substantial heterogeneity: 1% of eligible firms issu...