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Financial constraints and product market competition: ex ante vs. ex post incentives

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  • Povel, Paul
  • Raith, Michael

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 22 (2004)
Issue (Month): 7 (September)
Pages: 917-949

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Handle: RePEc:eee:indorg:v:22:y:2004:i:7:p:917-949

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Web page: http://www.elsevier.com/locate/inca/505551

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References

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  1. Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
  2. Kovenock, Dan & Phillips, Gordon M, 1997. "Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions," Review of Financial Studies, Society for Financial Studies, vol. 10(3), pages 767-803.
  3. Hart, Oliver & Moore, John, 1999. "Foundations of Incomplete Contracts," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 115-38, January.
  4. Luigi Zingales, 1997. "Survival of the Fittest or the Fattest? Exit and Financing in the Trucking Industry," NBER Working Papers 6273, National Bureau of Economic Research, Inc.
  5. Phillips, Gordon M., 1995. "Increased debt and industry product markets An empirical analysis," Journal of Financial Economics, Elsevier, vol. 37(2), pages 189-238, February.
  6. Khanna, Naveen & Tice, Sheri, 2000. "Strategic Responses of Incumbents to New Entry: The Effect of Ownership Structure, Capital Structure, and Focus," Review of Financial Studies, Society for Financial Studies, vol. 13(3), pages 749-79.
  7. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-40, December.
  8. Paul Povel & Michael Raith, 2004. "Optimal Debt with Unobservabable Investments," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 599-616, Autumn.
  9. Oliver Hart & John Moore, 1997. "Default and Renegotiation: A Dynamic Model of Debt," Harvard Institute of Economic Research Working Papers 1792, Harvard - Institute of Economic Research.
  10. Martin S. Fridson, 1994. "The State Of The High Yield Bond Market: Overshooting Or Return To Normalcy?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 7(1), pages 85-85.
  11. Faure-Grimaud, Antoine, 2000. "Product market competition and optimal debt contracts: The limited liability effect revisited," European Economic Review, Elsevier, vol. 44(10), pages 1823-1840, December.
  12. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
  13. Opler, Tim C & Titman, Sheridan, 1994. " Financial Distress and Corporate Performance," Journal of Finance, American Finance Association, vol. 49(3), pages 1015-40, July.
  14. Judith A. Chevalier & David S. Scharfstein, 1994. "Capital Market Imperfections and Countercyclical Markups: Theory and Evidence," NBER Working Papers 4614, National Bureau of Economic Research, Inc.
  15. Dan Kovenock & Gordon M Phillips, 1995. "Capital Structure And Product Market Rivalry: How Do We Reconcile Theory And Evidence?," Working Papers 95-3, Center for Economic Studies, U.S. Census Bureau.
  16. Showalter, Dean, 1999. "Strategic debt: evidence in manufacturing," International Journal of Industrial Organization, Elsevier, vol. 17(3), pages 319-333, April.
  17. Caillaud, Bernard & Rey, Patrick, 1995. "Strategic aspects of vertical delegation," European Economic Review, Elsevier, vol. 39(3-4), pages 421-431, April.
  18. Katz, Michael L., 1991. "Game-Playing Agents: Unobservable Contracts as Precommitments," Department of Economics, Working Paper Series qt79b870w0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  19. James A. Brander & Tracy R. Lewis, 1988. "Bankruptcy Costs and the Theory of Oligopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 221-43, May.
  20. Maggi, Giovanni, 1996. "Strategic Trade Policies with Endogenous Mode of Competition," American Economic Review, American Economic Association, vol. 86(1), pages 237-58, March.
  21. Showalter, Dean M, 1995. "Oligopoly and Financial Structure: Comment," American Economic Review, American Economic Association, vol. 85(3), pages 647-53, June.
  22. Bolton, Patrick & Scharfstein, David S, 1990. "A Theory of Predation Based on Agency Problems in Financial Contracting," American Economic Review, American Economic Association, vol. 80(1), pages 93-106, March.
  23. Vojislav Maksimovic, 1988. "Capital Structure in Repeated Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 389-407, Autumn.
  24. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
  25. Cleary, Sean & Povel, Paul E M & Raith, Michael, 2004. "The U-Shaped Investment Curve: Theory and Evidence," CEPR Discussion Papers 4206, C.E.P.R. Discussion Papers.
  26. Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-47, Supplemen.
  27. Steven M. Fazzari & R. Glenn Hubbard & BRUCE C. PETERSEN, 1988. "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
  28. Harris, Milton & Raviv, Artur, 1995. "The Role of Games in Security Design," Review of Financial Studies, Society for Financial Studies, vol. 8(2), pages 327-67.
  29. Maskin, Eric & Tirole, Jean, 1999. "Unforeseen Contingencies and Incomplete Contracts," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 83-114, January.
  30. Chevalier, Judith A, 1995. " Do LBO Supermarkets Charge More? An Empirical Analysis of the Effects of LBOs on Supermarket Pricing," Journal of Finance, American Finance Association, vol. 50(4), pages 1095-1112, September.
  31. Maurer, Boris, 1999. "Innovation and investment under financial constraints and product market competition," International Journal of Industrial Organization, Elsevier, vol. 17(4), pages 455-476, May.
  32. Michael Raith, 2003. "Competition, Risk, and Managerial Incentives," American Economic Review, American Economic Association, vol. 93(4), pages 1425-1436, September.
  33. Hendel, Igal, 1996. "Competition under Financial Distress," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 309-24, September.
  34. Rune Stenbacka & Mihkel Tombak, 2002. "Investment, Capital Structure, and Complementarities Between Debt and New Equity," Management Science, INFORMS, vol. 48(2), pages 257-272, February.
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Citations

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Cited by:
  1. Jan Bena, 2009. "The effect of credit rationing on the shape of the competition-innovation relationship," LSE Research Online Documents on Economics 24419, London School of Economics and Political Science, LSE Library.
  2. Michael L. Katz, 2006. "Observable Contracts as Commitments: Interdependent Contracts and Moral Hazard," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(3), pages 685-706, 09.
  3. Jan Bena, 2008. "The Effect of Credit Rationing on the Shape of the Competition-Innovation Relationship," CERGE-EI Working Papers wp377, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Leach, J. Chris & Moyen, Nathalie & Yang, Jing, 2013. "On the strategic use of debt and capacity in rapidly expanding markets," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 332-344.
  5. Alexander Muravyev & Dorothea Schäfer & Oleksandr Talavera, 2007. "Entrepreneurs' Gender and Financial Constraints: Evidence from International Data," Discussion Papers of DIW Berlin 706, DIW Berlin, German Institute for Economic Research.
  6. PICARD, Pierre & RUSLI, Ridwan D., 2012. "State owned firms: private debt, cost revelation and welfare," CORE Discussion Papers 2012047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Tetsuya Shinkai & Takao Ohkawa & Makoto Okamura & Kozo Harimaya, 2012. "Why did the Dutch East India Co. outperform the British East India Co.? —A theoretical explanation based on the objective of the firm and limited liability—," Discussion Paper Series 96, School of Economics, Kwansei Gakuin University, revised Dec 2012.
  8. Jaideep Chowdhury, 2014. "Impact of financial constraint on incentive compensation and product market behavior," Economics Bulletin, AccessEcon, vol. 34(1), pages 115-124.
  9. Andrew F. Newman & Patrick Legros, 2011. "Incomplete Contracts and Industrial Organization: A Survey," Boston University - Department of Economics - Working Papers Series WP2011-036, Boston University - Department of Economics.
  10. Arping, Stefan & Diaw, Khaled M., 2008. "Sunk costs, entry deterrence, and financial constraints," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 490-501, March.
  11. Natasha Agarwal & Chris Milner & Alejandro Riaño, . "Credit Constraints and FDI Spillovers in China," Discussion Papers 11/21, University of Nottingham, GEP.
  12. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1999. "Agency Costs, Firm Behaviour and the Nature of Competition," CEPR Discussion Papers 2130, C.E.P.R. Discussion Papers.
  13. Hege, Ulrich & Hennessy, Christopher, 2007. "Acquisition Values and Optimal Financial (In)Flexibility," Les Cahiers de Recherche 878, HEC Paris.
  14. Pontuch, Peter, 2011. "Product Market Concentration, Financing Constraints, and Firms' Business Cycle Sensitivity," Economics Papers from University Paris Dauphine 123456789/6271, Paris Dauphine University.
  15. Tetsuya Shinkai & Takao Ohkawa & Makoto Okamura & Kozo Harimaya, 2012. "Delegation and Limited Liability in a Modern Capitalistic Economy," Discussion Paper Series 87, School of Economics, Kwansei Gakuin University, revised Apr 2012.
  16. Nishihara, Michi & Shibata, Takashi, 2014. "Preemption, leverage, and financing constraints," Review of Financial Economics, Elsevier, vol. 23(2), pages 75-89.
  17. Khanna, Naveen & Schroder, Mark, 2010. "Optimal debt contracts and product market competition with exit and entry," Journal of Economic Theory, Elsevier, vol. 145(1), pages 156-188, January.
  18. Andrew F. Daughety, 2006. "Cournot Competition," Vanderbilt University Department of Economics Working Papers 0620, Vanderbilt University Department of Economics.

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