Key research themes
1. How do firms' capital structure dynamics and leverage decisions affect firm value and performance across different contexts?
This theme investigates the impact of leverage—how firms use debt and equity financing—on firm value and performance. It includes exploration of capital structure dynamics, trade-offs between debt benefits and costs, and contingent factors such as firm size, industry, and market conditions, especially in emerging economies. These studies are central to understanding optimal leverage strategies for enhancing shareholder value and firm sustainability.
Key finding: Identifies the leverage ratchet effect where firms' shareholders resist reducing leverage despite improvements in firm value and prefer increasing leverage—even with junior debt—causing asymmetric and history-dependent... Read more