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Leasing Decisions and Credit Constraints: Empirical Analysis on a Sample of Italian Firms
Author(s) -
Cosci Stefania,
Guida Roberto,
Meliciani Valentina
Publication year - 2015
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/j.1468-036x.2013.12019.x
Subject(s) - sample (material) , lease , business , debt , finance , capital structure , capital (architecture) , debt financing , monetary economics , economics , chemistry , archaeology , chromatography , history
Although lease financing provides a significant source of funds enabling many companies to invest, few studies examine the determinants of leasing in Continental Europe and we are aware of no study on the Italian case. This paper investigates the relationship between financial constraints and leasing decisions for a sample of Italian firms. In particular, it investigates the determinants of firm leasing decisions, the degree of substitutability between leasing and debt, and the impact of leasing on the probability of firms feeling ‘credit rationed’. Our results support the hypothesis that leasing preserves capital, thus helping to relieve credit constraints .