The impact of capital structure on the decision to outsource with long term contracts

Detalhes bibliográficos
Autor(a) principal: Teixeira, João
Data de Publicação: 2011
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.3/4960
Resumo: This paper analyzes how capital structure affects the firms’ strategic choice between outsourcing with long term contracts and outsourcing to the spot market. When outsourcing to the spot market firms are exposed to price uncertainty, whereas a long term contract allows them to set in advance the outsourcing price. We show that, to the extent that leverage and uncertainty can lead to financial distress costs in bad states of nature, firms may use long term contracts as a risk management device to hedge input price uncertainty.
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spelling The impact of capital structure on the decision to outsource with long term contractsOutsourcingFinancial DistressLong Term ContractsUncertaintyThis paper analyzes how capital structure affects the firms’ strategic choice between outsourcing with long term contracts and outsourcing to the spot market. When outsourcing to the spot market firms are exposed to price uncertainty, whereas a long term contract allows them to set in advance the outsourcing price. We show that, to the extent that leverage and uncertainty can lead to financial distress costs in bad states of nature, firms may use long term contracts as a risk management device to hedge input price uncertainty.Universidade dos AçoresRepositório da Universidade dos AçoresTeixeira, João2019-01-23T18:45:40Z2011-112011-11-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.3/4960engTeixeira, João C. A. (2011). The impact of capital structure on the decision to outsource with long term contracts, “Working Paper Series” nº 21/11, 31 pp.. Ponta Delgada: Universidade dos Açores, CEEAplA-A.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2022-12-20T14:33:14Zoai:repositorio.uac.pt:10400.3/4960Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T16:27:16.284952Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv The impact of capital structure on the decision to outsource with long term contracts
title The impact of capital structure on the decision to outsource with long term contracts
spellingShingle The impact of capital structure on the decision to outsource with long term contracts
Teixeira, João
Outsourcing
Financial Distress
Long Term Contracts
Uncertainty
title_short The impact of capital structure on the decision to outsource with long term contracts
title_full The impact of capital structure on the decision to outsource with long term contracts
title_fullStr The impact of capital structure on the decision to outsource with long term contracts
title_full_unstemmed The impact of capital structure on the decision to outsource with long term contracts
title_sort The impact of capital structure on the decision to outsource with long term contracts
author Teixeira, João
author_facet Teixeira, João
author_role author
dc.contributor.none.fl_str_mv Repositório da Universidade dos Açores
dc.contributor.author.fl_str_mv Teixeira, João
dc.subject.por.fl_str_mv Outsourcing
Financial Distress
Long Term Contracts
Uncertainty
topic Outsourcing
Financial Distress
Long Term Contracts
Uncertainty
description This paper analyzes how capital structure affects the firms’ strategic choice between outsourcing with long term contracts and outsourcing to the spot market. When outsourcing to the spot market firms are exposed to price uncertainty, whereas a long term contract allows them to set in advance the outsourcing price. We show that, to the extent that leverage and uncertainty can lead to financial distress costs in bad states of nature, firms may use long term contracts as a risk management device to hedge input price uncertainty.
publishDate 2011
dc.date.none.fl_str_mv 2011-11
2011-11-01T00:00:00Z
2019-01-23T18:45:40Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.3/4960
url http://hdl.handle.net/10400.3/4960
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Teixeira, João C. A. (2011). The impact of capital structure on the decision to outsource with long term contracts, “Working Paper Series” nº 21/11, 31 pp.. Ponta Delgada: Universidade dos Açores, CEEAplA-A.
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Universidade dos Açores
publisher.none.fl_str_mv Universidade dos Açores
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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