Francesco D’Acunto, Ryan Liu, Carolin E. Pflueger, Michael Weber
{"title":"Flexible Prices and Leverage","authors":"Francesco D’Acunto, Ryan Liu, Carolin E. Pflueger, Michael Weber","doi":"10.2139/ssrn.2692893","DOIUrl":null,"url":null,"abstract":"The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital structure. Sticky-price firms increased leverage more than exible-price firms following the staggered implementation of the Interstate Banking and Branching Efficiency Act across states and over time, which we use in a difference-in-differences strategy. Firms’ frequency of price adjustment did not change around the deregulation.","PeriodicalId":292256,"journal":{"name":"Chicago Booth GFM: Capital Markets (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2016-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"82","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Chicago Booth GFM: Capital Markets (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2692893","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 82
Abstract
The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital structure. Sticky-price firms increased leverage more than exible-price firms following the staggered implementation of the Interstate Banking and Branching Efficiency Act across states and over time, which we use in a difference-in-differences strategy. Firms’ frequency of price adjustment did not change around the deregulation.
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