Capital structure and market power
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2016
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2559
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118 leaves
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b197637
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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Prajya Ngamjan (2016). Capital structure and market power. Retrieved from: https://repository.nida.ac.th/handle/662723737/5899.
Title
Capital structure and market power
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Abstract
Employing a sample set of 289 Thai listed firms during 2005-2014, the
research found that leverage leads to increasing market power as measured by Tobin’s
Q and sales growth. The explanation is given by the limited liability theory; that is, a
firm employs debt as a commitment tool to compete aggressively in product markets.
The main finding remained robust through different leveraged firms/groups, different
market concentration groups, different time periods, and in different industrial sectors.
Additionally, leverage had stronger effects on market power: if the period was during
economic expansion, if the firm was low leveraged, if the firm was in a low-leveraged
sector, and if the firm was in an unconcentrated industrial sector. Furthermore, when
using total debt instead of long-term debt as the independent variable, the explanatory
powers captured by the adjusted 𝑅�
s substantially increased. This suggests that the
portion of short-term debt is an important source of finance and plays an important
role in managing financial strategies, supporting the findings of previous research,
that compared to developed countries, developing countries rely more on short-term
finance.
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Thesis (Ph.D. (Finance))--National Institute of Development Administration, 2016