by Thomas Kroen, Ernest Liu,
Atif R. Mian and Amir Sufi
dated October 18, 2021
This paper finds that falling interest rates
disproportionately benefit industry leaders,
especially when the initial interest rate is
already low. This is due to: 1)
the cost of borrowing falls more for industry
leaders; 2) industry leaders are able
to raise more debt, increase leverage, and
buyback more shares; and 3) capital
investment and acquisitions increase more
for industry leaders.
Note: Full-text of this paper can be obtained by clicking
on the above title.
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