Replication data for: Running on Empty? Financial Leverage and Product Quality in the Supermarket Industry
Principal Investigator(s): View help for Principal Investigator(s) David A. Matsa
Version: View help for Version V1
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| AEJMicro-20090019_data | 12/07/2019 03:16:PM | ||
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text/plain | 14.6 KB | 12/07/2019 10:16:AM |
Project Citation:
Matsa, David A. Replication data for: Running on Empty? Financial Leverage and Product Quality in the Supermarket Industry. Nashville, TN: American Economic Association [publisher], 2011. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116439V1
Project Description
Summary:
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This paper examines whether debt financing can undermine a supermarket
firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of a retailer's quality. Using US consumer price index microdata to track inventory shortfalls, I find that taking on high financial leverage
increases shortfalls. Highly leveraged firms appear to be degrading their products' quality in order to preserve current cash flow for debt service. Although reducing quality can erode both current sales and customer loyalty, firms appear to be willing to risk these outcomes in order to achieve benefits associated with debt finance. (JEL D92, G31, G32, L15, L81)
Scope of Project
JEL Classification:
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D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
L15 Information and Product Quality; Standardization and Compatibility
L81 Retail and Wholesale Trade; e-Commerce
D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
L15 Information and Product Quality; Standardization and Compatibility
L81 Retail and Wholesale Trade; e-Commerce
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