Discussion paper no. 99-02
Debt as a Regulatory Constraint
Lars Jebjerg
ABSTRACT: This paper is about using specific investments and secured debt to shield a firm from exploitation by a regulatory authority. It is shown that specific investments and secured debt constrain the regulatory authority in its choice of regime, by providing a credible threat of bankruptcy. PDF
Keywords: regulation, financial structure, hold-up problems
JEL Classification: D21, G38, L50