Show simple item record

dc.contributor.advisorAltı, Aydoğan
dc.creatorDemirci, Iremen
dc.date.accessioned2013-09-11T15:24:12Zen
dc.date.accessioned2017-05-11T22:33:27Z
dc.date.available2017-05-11T22:33:27Z
dc.date.issued2013-08en
dc.date.submittedAugust 2013en
dc.identifier.urihttp://hdl.handle.net/2152/21156en
dc.descriptiontexten
dc.description.abstractThis dissertation studies the impact of business relations on firms' financing decisions. The goal is to understand the determinants of business relations and how they interact with firms' capital structure. In the first chapter, I present a model which studies the role of customer risk in suppliers' financing choice. The base model predicts that when faced with a high-risk customer, suppliers with significant continuation values prefer equity over debt. The extended model allows for analyzing the supplier's decision to concentrate on a single major customer or diversify into multiple customers. The model shows that by decreasing the risk of premature liquidation, diversification allows for the supplier to take advantage of the bargaining benefits of debt. The second chapter empirically investigates the impact of customer risk on suppliers' capital structure. Consistent with the model presented in the first chapter, both cross-sectional and time-series regression results show that customer risk has a negative impact on suppliers' debt financing. Customer risk is an important determinant of suppliers' method of financing as well. During the first two years of the relationship, suppliers with high-risk customers are more likely to raise equity. Comparing the impact of customer risk on different supplier groups shows that firms that operate in concentrated industries and younger firms are more sensitive to changes in customer risk. In further analyses I find that the risk is transferred from customers to suppliers: There is a lead-lag relationship between customer and supplier credit rating changes. Also, suppliers experience an increase in volatility of their stock returns after they start a new relationship with a risky customer. Results from further analyses are suggestive of customer risk affecting capital structure through its impact on supplier risk.en
dc.format.mimetypeapplication/pdfen
dc.language.isoen_USen
dc.subjectCapital structureen
dc.subjectBusiness relationsen
dc.titleEssays on business relations and corporate financeen
dc.description.departmentFinanceen
dc.date.updated2013-09-11T15:24:12Zen


Files in this item

FilesSizeFormatView

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record