 Self-disclosed peer effects on corporate capital structureBahman Fathi Ajirloo and Lorne Switzer Journal of International Financial Markets, Institutions and Money, 2022, vol. 78, issue C Abstract: We study a network of interconnected firms and examine the impact of the firm’s business relationships with peers, rivals, and customers on its capital structure. Peer effect models commonly define peers based on three- or four-digit Standard Industrial Classification (SIC) codes. This renders them susceptible to measurement error and identification problems. These issues are of consequence, since we show that: a) many firms change industry affiliations over time and b) over one-half of peers revealed by managers to shareholders in a given year reside in industries that differ from the firm’s static of historical SIC code. We find that peer effects on financial policy are robust when the firm’s revealed peer group consists of self-disclosed rivals that share at least one customer with the firm in a two-year time window. Keywords: Capital structure; Peer effects; Revealed peer groups; Corporate networks; Rivalry; Market competition; Common customers (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:78:y:2022:i:c:s1042443122000506 DOI: 10.1016/j.intfin.2022.101562 Access Statistics for this article Journal of International Financial Markets, Institutions and Money is currently edited by I. Mathur and C. J. Neely More articles in Journal of International Financial Markets, Institutions and Money from Elsevier |
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