We show how product market competition affects capital structure by developing a tractable model that embeds the tradeoff between the tax benefits and bankruptcy costs of debt in an industry equilibrium setting with heterogeneous, imperfectly competitive firms. Different determinants of...

1 Introduction -- 2 Financial structure and strategic competition -- 3 Credit financing and strategic competition -- 4 Venture capital financing and strategic competition -- 5 Conclusion -- References -- Figures -- Tables -- List of symbols.