Managers, debt and industry equilibrium

Nier, Erlend (1998) Managers, debt and industry equilibrium. Financial Markets Group Discussion Papers (289). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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Abstract

This paper reconsiders the strategic effect of debt under the assumption that quantity choices are made by managers whose objective is to avoid bankruptcy. The basic result is that quantity choices, which are strategic substitutes under profit maximization, may turn into strategic complements under reasonable assumptions on the profit function. The value of delegation, optimal wage contracts, and empirical implications are discussed.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 1998 The Author(s)
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
Date Deposited:	29 Jun 2023 09:48
Last Modified:	16 Sep 2023 00:03
URI:	http://eprints.lse.ac.uk/id/eprint/119152

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