This paper examines how firms' reliance on the supply chain affects capital structure decision via suppliers' product pricing. In the model firms' reliance on a supply chain delivers either a hedge effect or a risk-amplification effect, depending on the direction and magnitude of product demand...

Using one composite and five alternative measures of asset liquidity, we examine the role of short-term debt in taming the dark side of asset liquidity: the negative effect of high asset liquidity facing unsecured bondholders. Addressing the joint determination of leverage and debt maturity, the...