This paper investigates how multinational firms choose their capital structure in response to political risk. We focus on two choice variables, the leverage and the ownership structure of the foreign affiliate, and we distinguish different types of political risk, like expropriation, corruption...

This study provides new stylized facts on the determinants of corporate failure and acquisition in Germany. It also offers important lessons for the design of empirical studies. We show that firms experiencing failure or acquisition are significantly different from surviving firms on a number of...