Survival of the Fittest or the Fattest? Exit and Financing in the Trucking Industry

51 Pages Posted: 1 Jul 2000 Last revised: 7 Oct 2010

See all articles by Luigi Zingales

Luigi Zingales

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: November 1997

Abstract

This paper studies the impact that capital market imperfections have on the natural" selection of the most efficient firms by estimating the effect of the pre-deregulation level of" leverage on the survival of trucking firms after the Carter deregulation. Highly leveraged" carriers are less likely to survive the deregulation shock, even after controlling for various" measures of efficiency. This effect is stronger in the imperfectly competitive segment of the" motor carrier industry. High debt seems to affect survival by curtailing investments and reducing" the price per-ton-mile that a carrier can afford to charge after deregulation. "

Suggested Citation

Zingales, Luigi, Survival of the Fittest or the Fattest? Exit and Financing in the Trucking Industry (November 1997). NBER Working Paper No. w6273. Available at SSRN: https://ssrn.com/abstract=226030

Luigi Zingales (Contact Author)

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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