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Bargaining and brinkmanship: capital structure choice by regulated firms

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Bargaining and brinkmanship: capital structure choice by regulated firms. / Dasgupta, Sudipto; Nanda, Vikram.
In: International Journal of Industrial Organization, Vol. 11, No. 4, 1993, p. 215-234.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Dasgupta, S & Nanda, V 1993, 'Bargaining and brinkmanship: capital structure choice by regulated firms', International Journal of Industrial Organization, vol. 11, no. 4, pp. 215-234. https://doi.org/10.1016/0167-7187(93)90021-4

APA

Dasgupta, S., & Nanda, V. (1993). Bargaining and brinkmanship: capital structure choice by regulated firms. International Journal of Industrial Organization, 11(4), 215-234. https://doi.org/10.1016/0167-7187(93)90021-4

Vancouver

Dasgupta S, Nanda V. Bargaining and brinkmanship: capital structure choice by regulated firms. International Journal of Industrial Organization. 1993;11(4):215-234. doi: 10.1016/0167-7187(93)90021-4

Author

Dasgupta, Sudipto ; Nanda, Vikram. / Bargaining and brinkmanship : capital structure choice by regulated firms. In: International Journal of Industrial Organization. 1993 ; Vol. 11, No. 4. pp. 215-234.

Bibtex

@article{088903735b304fc392778de51159446a,
title = "Bargaining and brinkmanship: capital structure choice by regulated firms",
abstract = "A bargaining model of regulation is developed. It is shown that regulated firms can improve their bargaining positions and induce the regulator to set higher prices for firm output by choosing more debt. Firms, in choosing an optimal level of debt, trade off this bargaining advantage against expected bankruptcy costs. The model predicts that firms would tend to choose higher levels of debt in harsher regulatory environments. This prediction is shown to be consistent with cross-sectional evidence for U.S. electric utilities for the sample period 1972–1983.",
author = "Sudipto Dasgupta and Vikram Nanda",
year = "1993",
doi = "10.1016/0167-7187(93)90021-4",
language = "English",
volume = "11",
pages = "215--234",
journal = "International Journal of Industrial Organization",
issn = "0167-7187",
publisher = "Elsevier Inc.",
number = "4",

}

RIS

TY - JOUR

T1 - Bargaining and brinkmanship

T2 - capital structure choice by regulated firms

AU - Dasgupta, Sudipto

AU - Nanda, Vikram

PY - 1993

Y1 - 1993

N2 - A bargaining model of regulation is developed. It is shown that regulated firms can improve their bargaining positions and induce the regulator to set higher prices for firm output by choosing more debt. Firms, in choosing an optimal level of debt, trade off this bargaining advantage against expected bankruptcy costs. The model predicts that firms would tend to choose higher levels of debt in harsher regulatory environments. This prediction is shown to be consistent with cross-sectional evidence for U.S. electric utilities for the sample period 1972–1983.

AB - A bargaining model of regulation is developed. It is shown that regulated firms can improve their bargaining positions and induce the regulator to set higher prices for firm output by choosing more debt. Firms, in choosing an optimal level of debt, trade off this bargaining advantage against expected bankruptcy costs. The model predicts that firms would tend to choose higher levels of debt in harsher regulatory environments. This prediction is shown to be consistent with cross-sectional evidence for U.S. electric utilities for the sample period 1972–1983.

U2 - 10.1016/0167-7187(93)90021-4

DO - 10.1016/0167-7187(93)90021-4

M3 - Journal article

VL - 11

SP - 215

EP - 234

JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

SN - 0167-7187

IS - 4

ER -