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Real Assets and Capital Structure

Journal of financial and quantitative analysis, 2013-10, Vol.48 (5), p.1333-1370 [Peer Reviewed Journal]

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Title:
Real Assets and Capital Structure
Author: Campello, Murillo ; Giambona, Erasmo
Subjects: Assets ; Balance sheets ; Book value ; Business structures ; Capital structure ; Coefficients ; Economic models ; Estimators ; Federal legislation ; Financial leverage ; Military base closures ; Military bases ; Quantitative analysis ; Real estate ; Realignment ; Studies ; Tangible assets
Is Part Of: Journal of financial and quantitative analysis, 2013-10, Vol.48 (5), p.1333-1370
Description: We characterize the relation between asset structure and capital structure by exploiting variation in the salability of corporate assets. To establish this link, we distinguish across different assets in firms’ balance sheets (machinery, land, and buildings) and use an instrumental approach that incorporates market conditions for those assets. We also use a natural experiment driving differential increases in the supply of real estate assets across the United States: The Defense Base Closure and Realignment Act of 1990. Consistent with a supply-side view of capital structure, we find that asset redeployability is a main driver of leverage when credit frictions are high.
Publisher: New York, USA: Cambridge University Press
Language: English
Identifier: ISSN: 0022-1090
EISSN: 1756-6916
DOI: 10.1017/S0022109013000525
CODEN: JFQAAC
Source: ProQuest Central

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