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Three Essays On Capital Structure And Product Market Interactions, Ying Zheng

Theses and Dissertations

Capital structure can have important consequences for firm value. High leverage increases firms’ probability of bankruptcy, and is shown to be the primary cause of financial distress. As suggested by a strand of literature on capital structure and product market interactions, high leverage is costly because financial weakness could induce unfavorable actions by product market participants such as customers and competitors. While the costs of high leverage are well documented in the extant literature, little is known on the factors that influence the costs of high leverage. This dissertation addresses this gap in the literature by examining how the costs …