Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Entire DC Network
A Survey Of The Relation Between Capital Structure And Corporate Strategy, M. La Rocca, T. La Rocca, D. Gerace
A Survey Of The Relation Between Capital Structure And Corporate Strategy, M. La Rocca, T. La Rocca, D. Gerace
Australasian Accounting, Business and Finance Journal
This paper responds to the general call for integration between finance and strategy research by examining how financial decisions are related to corporate strategy. In particular, the paper focuses on the link between capital structure and strategy. Corporate strategies complement traditional finance paradigms and extend our insight into a firm’s decisions regarding capital structure. Equity and debt must be considered as financial instruments as well as strategic instruments of corporate governance (Williamson 1988). Debt subordinates governance activities to stricter management, while equity allows for greater flexibility and decisionmaking power. The literature on finance and strategy analyzes how the strategic actions …