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- W1946150659 abstract "The paper aims at empirically investigating the relationship between regulation and the capital structure of the regulated firm, A key aspect of the referred relationship pertains a leverage effect according to which debt could be increased as a response to previous physical capital investment with an ultimate goal of inducing higher rates. Theoretical models like Spiegel and Spulber [1997, RAND Journal of Economics] highlight that effect. The present paper considers a panel data set of local exchange carriers-LECs in the U.S. and investigate Granger causality between changes in long-term debt (NDEBT) and gross investment (INV) in physical capital. The evidence accruing from a dynamic panel data estimation indicates an uni-directional causality from INV to NDEBT and therefore is, to a large extent, consistent with a leverage effect and with the notion that the size of the firm's investment project can impose a restriction on the amount of new debt. The result prevails independent of a control variable that indicates the regulatory regime." @default.
- W1946150659 created "2016-06-24" @default.
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- W1946150659 date "2009-01-01" @default.
- W1946150659 modified "2023-09-25" @default.
- W1946150659 title "Capital Structure and Regulation in U.S. Local Telephony: An Exploratory Econometric Study" @default.
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- W1946150659 doi "https://doi.org/10.2139/ssrn.1427145" @default.
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