The Effect of Leverage on Bidding Behavior: Theory and Evidence from the FCC Auctions

Financing and takeovers

“…He also finds that this is the second best proxy (after stock returns) for explaining debt ratio changes for Compustat firms. Clayton and Ravid (2002) find empirical support for the prediction that firms with higher leverage are likely to lose bidding contests.…”

“…Welch (2004) reports that ''firms that have engaged in takeover activity tend to increase leverage.' ' Clayton and Ravid (2002) find empirical support for the prediction that firms with higher leverage are likely to lose bidding contests. 2 Our results are also consistent with the evidence on leverage, product market competition, and investment.…”

The impact of strategic interaction on earnings expectations associated with corporate product strategies

“…Strategic interactions among firms have been found to be important in explaining firms' capital structure choices (e.g., Clayton and Ravid, 2002), strategic investment decisions (Sundaram et al, 1996;Chen et al, 2002), share repurchase decisions (Massa et al, 2007), executive compensation schemes (Aggarwal and Samwick, 1999;Kedia, 2006;Cuñat and Guadalupe, 2009), and analyst earnings forecast accuracy (Datta et al, 2011). These studies do not explore the role of strategic competition in the nature of earnings information conveyed by corporate actions.…”

Estimating product market competition: Methodology and application

“…See alsoBolton and Scharfstein (1990),Dotan and Ravid (1985),Hart (1983),Maksimovic (1988),Ravid (1988),and Scharfstein (1988).2 The exceptions areClayton and Ravid (2002),Chevalier (1995),Kovenock and Philips (1997),Phillips (1995),Ryan and Wiggins (2002) andSundaram et al (1996).…”