Flexible Prices and Leverage
Francesco D’Acunto,
Ryan Liu,
Carolin Pflueger and
Michael Weber
No 23066, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most flexible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital structure. Sticky-price firms increased leverage more than flexible-price firms following the staggered implementation of the Interstate Banking and Branching Efficiency Act across states and over time, which we use in a difference-in-differences strategy. Firms' frequency of price adjustment did not change around the deregulation.
JEL-codes: E12 E44 G28 G32 G33 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-cfn and nep-mac
Note: CF EFG ME
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Citations: View citations in EconPapers (10)
Published as Francesco D’Acunto & Ryan Liu & Carolin Pflueger & Michael Weber, 2018. "Flexible prices and leverage," Journal of Financial Economics, .
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Journal Article: Flexible prices and leverage (2018)
Working Paper: Flexible Prices and Leverage (2017)
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