| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 7361730 | Journal of Financial Economics | 2018 | 52 Pages |
Abstract
The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most flexible-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 flexible-price firms following the staggered implementation of bank deregulation 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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Authors
Francesco D'Acunto, Ryan Liu, Carolin Pflueger, Michael Weber,