Author

Ferrés, Daniel ; Ormazabal, Gaizka ; Povel, Paul ; Sertsios, Giorgio

Editor

Universidad de Montevideo, Facultad de Ciencias Empresariales y Economía, Departamento de Economía

Date

2016

Extensión

62 p.

Abstract

We study the financial leverage of firms that collude by forming a cartel. We find that cartel firms have lower leverage ratios during collusion periods, consistent with the idea that reductions in leverage help increase cartel stability. Cartel firms have a surprisingly large economic footprint (they represent more than 20% of the total market capitalization in the U.S.), so understanding their decisions is relevant. Our findings show that anti-competitive behavior has a significant effect on capital structure choices. They also shed new light on the relation between profitability and financial leverage.

Palabras claves

Capital structure Financial leverage Financial policies Collusion Cartels Trigger strategies

Tipo

Documento de trabajo

Derechos

Abierto

Versión

Publicada

En

Documentos de trabajo del Departamento de Economía

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