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Competitive Environment, Indebtedness and Asset Specificity: Evidence from Spanish Firms

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  • Manuel Sánchez Valadez

Abstract

In the firm's competitive strategy act together their financial decision and their decisions in the product markets. Even if in the last three decades the theoretical and empirical literature has growth, still are topics few explored. One of them is the relationship between firm's asset specificity, as a characteristic of the competitive environment, and their indebtedness as competitive tool. This paper tries answer if additionally to the level of specificity in the firm's assets the corporations use their indebtedness as another tool in their competitive strategy. The results show that the asset specificity influences in different way the firms' debt, the effect differs accordingly at the debt' maturity and the competitive environment faced.

Suggested Citation

  • Manuel Sánchez Valadez, 2013. "Competitive Environment, Indebtedness and Asset Specificity: Evidence from Spanish Firms," Working Papers 2013-15, Banco de México.
  • Handle: RePEc:bdm:wpaper:2013-15
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    File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7B64024C07-D252-DDB4-EC44-03675B7361C4%7D.pdf
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    Keywords

    Asset specificity; Indebtedness; Competitive strategy;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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