Capital structure decisions along the supply chain: Evidence from import competition

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This paper studies the spillover effect of import competition in downstream industries on upstream capital structure. We find that a large reduction in import tariffs in a customer industry induces suppliers to choose more conservative financial policies. We show that firms lower their leverage more when the customer-supplier relationship is more valuable to the firms and when firms are more vulnerable to the downstream shock. Finally, firms adjust their leverage mainly by issuing more equity.
Publisher
PALGRAVE MACMILLAN LTD
Issue Date
2019-08
Language
English
Article Type
Article
Citation

JOURNAL OF INTERNATIONAL BUSINESS STUDIES, v.50, no.6, pp.873 - 894

ISSN
0047-2506
DOI
10.1057/s41267-019-00225-9
URI
http://hdl.handle.net/10203/275918
Appears in Collection
MG-Journal Papers(저널논문)
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