Asset specificity and a firm’s borrowing ability: an empirical analysis of manufacturing firms

This paper investigates the importance of asset specificity in explaining differences in firms’ ability to borrow money

Dijana Močnik

2002

Scholarcy highlights

  • This paper investigates the importance of asset specificity in explaining differences in firms’ ability to borrow money
  • We investigated whether there is a relationship between asset specificity and the debt ratio of a Slovene manufacturing firm
  • The basic idea of the research was to link the sources of finance that define property rights and the attributes of the assets that are the objects of finance
  • A firm’s capital structure can be viewed as a description of the allocation of risk and control among investors

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