Strategic debt with multi-task technologies

Alberto Dalmazzo

Canadian Journal of Economics, 2000, vol. 33, issue 1, 252-270

Abstract: In this paper it is shown that when employees have ex post bargaining power, the entrepreneur will try to avoid technologies that are based on a large number of complementary tasks. We demonstrate that the entrepreneur can shelter profit from the employees" rent-seeking behaviour by raising debt. Moreover, the strategic use of debt financing can favour the adoption of technologies that rely on synergies.

JEL-codes: G31 J30 L20 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (1)

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