We investigate the relationship between profitability and financial leverage for US listed non-financial corporations …-cost mark-ups notwithstanding high product similarity, the relationship between profitability and financial leverage is negative …. Instead, in the rest of the markets we find a positive relationship, consistent with the dynamic trade-off theory of corporate …

negative relation between profitability and financial leverage that is thought to be inconsistent with the trade-off theory …Operating leverage increases profitability and reduces optimal financial leverage. Thus, operating leverage generates a …, but is commonly observed in the data. We demonstrate the effect of operating leverage on firms' profitability and …

The folk wisdom is that competition reduces agency costs. We provide indirect empirical support for this view. We argue … competitive industries, the negative relation between past returns and current leverage will be attenuated. Theory suggests that …

The folk wisdom is that competition reduces agency costs. We provide indirect empirical support for this view. We argue … competitive industries, the negative relation between past returns and current leverage will be attenuated. Theory suggests that …

This note investigates the possibility of profit raising entry in network industries where firms follow Corporate … conventional wisdom and shows another channel the preceding literature has so far not explored for the possibility of a profit …