THE FINANCIAL CONSEQUENCES OF MONOPOLY POWER Academic Article uri icon

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abstract

  • This paper examines the relationship between corporate borrowing and monopoly power under the assumption that the objective of the firm is to maximize the probability of long-run survival. Time-series data for each of twenty-five large industrial corporations and covering the period 1955 to 1981 are used for this purpose. The estimation results indicate that, as expected, corporate borrowing is inversely related to monopoly power as measured by Tobin's q. Copyright 1991 by Blackwell Publishers Ltd and The Victoria University of Manchester

publication date

  • September 1991