Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Work by Geronimus cited in account of Serena Williams' maternal health complications

Alexander and Massey compare outcomes for children whose parents did and did not take part in Great Migration

Geronimus on pushing past early dismissal of her weathering hypothesis

More News

Highlights

Robert Wood Johnson Foundation health leadership development programs accepting applications

AA named 2018 Best Place to Live in America (out of 100 cities)

Remembering Jim Morgan, founding member of ISR and creator of the PSID

1/17/18: ISR screening and discussion of documentary "Class Divide" at Michigan Theater

More Highlights

Next Brown Bag

Mon, Jan 22, 2018, noon: Narayan Sastry

Capital structure with risky foreign investment

Archived Abstract of Former PSC Researcher

Desai, Mihir A., C. Fritz Foley, and James Hines. 2008. "Capital structure with risky foreign investment." Journal of Financial Economics, 88(3): 534-553.

Firms facing significant business risks have incentives to mitigate the costs of these risks by adjusting their capital structures. This paper investigates this link by analyzing the exposures of multinational firms to political risk. The evidence indicates that returns on investment in politically risky countries are more volatile than returns elsewhere. Multinational firms reduce their leverage in response to these political risks: a one standard deviation increase in foreign political risk is associated with 3.5% reduced leverage. The effect of foreign political risks on leverage is most pronounced for firms in industries whose returns are most susceptible to political influence. (C) 2007 Elsevier B.V. All rights reserved.

DOI:10.1016/j.jfineco.2007.05.002 (Full Text)

Browse | Search : All Pubs | Next