Business Commons^™

Conflicting Voices And Strategic Choices: Capital Structure Heterogeneity And Strategic Actions, Chetan Chawla

Doctoral Dissertations

The mix of debt and equity in a firm’s capital structure has been associated with varied strategic actions, such as diversification and innovation. Different forms of debt and equity have been associated with particular types of strategic actions. Although there are clear differences between debt and equity, I argue there are also similarities across the two forms of capital. I develop a theoretical framework to categorize both debt and equity along the dimensions of time horizon and risk tolerance, so as to categorize the providers of capital as Transient Equity, Dedicated Equity, Transactional Debt, and Relational Debt. I then empirically …