Marquez, Robert; Yavuz, M. Deniz - In: Review of Financial Studies 26 (2013) 11, pp. 2961-2984
We analyze optimal financial contracts when the specificity of investments is endogenous. Specialization decreases the liquidation value of assets, but improves the asset's long-term productivity. While the former is known to make financing more difficult, we show that the latter can ease...