Optimal capital structure with earnings above a floor

Nishihara, Michi; Shibata, Takashi

doi:https://doi.org/10.1016/j.ejor.2025.04.023

Optimal capital structure with earnings above a floor

Nishihara, Michi; Shibata, Takashi

European Journal of Operational Research, 2025, 326(3), 656-673

アクセス数:148件（2026-02-16 00:35 集計）

固定URL: https://hdl.handle.net/11094/102196

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タイトル	Optimal capital structure with earnings above a floor
著者	NRID 1000020456940 1000020456940 ORCID 0000-0003-2673-1250 0000-0003-2673-1250 researchmap permalink nishiharamichi nishiharamichi Scopus Author ID 23397674300 23397674300 著者名 Nishihara, Michi
著者	著者名 Shibata, Takashi
キーワード等	Capital structure
	Competitive advantage
	Price floor
	Real options
	Regulated market
JEL分類コード (JEL)	G13
	G28
	G32
内容	Nishihara M., Shibata T.. Optimal capital structure with earnings above a floor. European Journal of Operational Research 326(3), 656-673 (2025); https://doi.org/10.1016/j.ejor.2025.04.023.
抄録	This paper derives the optimal capital structure of a firm whose earnings follow a geometric Brownian motion with a lower reflecting barrier. The barrier can be interpreted as a market intervention threshold (e.g., a price floor) by the government or an exit threshold of weak competitors in the market. Unlike in the standard model with no barrier, the firm is able to issue riskless debt to a certain capacity determined by the barrier. The higher the barrier, the larger the riskless debt capacity, and the firm prefers riskless capital structure rather than risky capital structure. Notably, with intermediate barrier levels, the firm can choose riskless capital structure with lower leverage than the level with no barrier. This mechanism can help explain debt conservatism observed in practice. The paper also entails several implications of public intervention by examining the lowest barrier (i.e., the weakest intervention) to achieve riskless capital structure.
出版者	Elsevier B.V.
収録物名	European Journal of Operational Research
巻(号)	326(3)
ページ	656-673
刊行年月	2025-06-26
言語	英語
ハンドルURL	https://hdl.handle.net/11094/102196
PISSN	03772217
関連情報 (isIdenticalTo)	DOI (出版社版) https://doi.org/10.1016/j.ejor.2025.04.023
アクセス権	open access
権利情報	This article is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
出版タイプ	Version of Record
カテゴリ	学術雑誌論文 Journal Article

資源タイプ	学術雑誌論文
ローカル資源タイプ	学術雑誌論文
DCMI資源タイプ	text
DCTERMS.bibliographicCitation	European Journal of Operational Research. 2025, 326(3), p. 656-673
DC.title	Optimal capital structure with earnings above a floor
DC.creator	Nishihara, Michi
DC.creator	Shibata, Takashi
DC.publisher	Elsevier B.V.
DC.language' scheme='DCTERMS.RFC1766	英語
DC.type' scheme='DCTERMS.DCMIType	text
DCTERMS.issued' scheme='DCTERMS.W3CDTF	2025-06-26
DC.identifier	https://doi.org/10.1016/j.ejor.2025.04.023
DC.subject	Capital structure
	Competitive advantage
	Price floor
	Real options
	Regulated market
DC.description	Nishihara M., Shibata T.. Optimal capital structure with earnings above a floor. European Journal of Operational Research 326(3), 656-673 (2025); https://doi.org/10.1016/j.ejor.2025.04.023.
DCTERMS.abstract	This paper derives the optimal capital structure of a firm whose earnings follow a geometric Brownian motion with a lower reflecting barrier. The barrier can be interpreted as a market intervention threshold (e.g., a price floor) by the government or an exit threshold of weak competitors in the market. Unlike in the standard model with no barrier, the firm is able to issue riskless debt to a certain capacity determined by the barrier. The higher the barrier, the larger the riskless debt capacity, and the firm prefers riskless capital structure rather than risky capital structure. Notably, with intermediate barrier levels, the firm can choose riskless capital structure with lower leverage than the level with no barrier. This mechanism can help explain debt conservatism observed in practice. The paper also entails several implications of public intervention by examining the lowest barrier (i.e., the weakest intervention) to achieve riskless capital structure.
DC.rights	This article is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
DC.format	102196
citation_title	Optimal capital structure with earnings above a floor
citation_author	Nishihara, Michi
citation_author	Shibata, Takashi
citation_publisher	Elsevier B.V.
citation_language	英語
citation_date	2025-06-26
citation_journal_title	European Journal of Operational Research
citation_volume	326
citation_issue	3
citation_firstpage	656
citation_lastpage	673
citation_doi	https://doi.org/10.1016/j.ejor.2025.04.023
citation_public_url	https://hdl.handle.net/11094/102196

Optimal capital structure with earnings above a floor

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