Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155559
Authors: 
D'Acunto, Francesco
Liu, Ryan
Pflueger, Carolin
Weber, Michael
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6317
Abstract: 
The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-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 exible-price firms following the staggered implementation of the Interstate Banking and Branching Efficiency Act 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.
Subjects: 
capital structure
nominal rigidities
bank deregulation
industrial organization and finance
price setting
bankruptcy
JEL: 
E12
E44
G28
G32
G33
Document Type: 
Working Paper

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