Prior studies have shown that Limited Partnerships (LPs) use less debt than corporations and conclude this is due to tax induced corporate borrowing. We suggest these observed differences result from risk differences between LPs. LPs formed around natural resource assets use less debt than LPs...

This paper extends our understanding of capital structure differences across organizational form. We build on existing capital structure literature concerning partnership debt use and suggest that high business risk, in combination with general partner (GP) unlimited liability, explains...