Abstract: . . .  Journal of Economics 110, 379-406. Stulz, Rene M., and Herb Johnson, 1985, An analysis of secured debt, Journal of Financial Economics 14, 501-521. Waldman, Michael, 1997, Eliminating the market for secondhand goods: An alter- native explanation for leasing, Journal of Law and Economics 40, 6192. 33 Page 34 Wolfson, Mark A., 1985, Tax, inventive, and risk-sharing issues in the allocation of property rights: The generalized lease-or-buy problem, Journal of Business 58, 159-171. 34 Page 35 Table 1: . . .
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. . .  leasing Leasing, Ability to Repossess, and Debt Capacity Page 1 Leasing, Ability to Repossess, and Debt Capacity *† Andrea L. Eisfeldt Northwestern University Adriano A. Rampini Northwestern University First Version: June 2005 This Version: September 2005 Abstract This paper studies the role of leasing of productive assets. When capital . . .
. . .  on operating leases) relative to total payments for capital services (sum of rental payments, interest rate times total assets, and depreciation) across asset deciles for total capital (solid), buildings and other structures (dashed), and machinery and equipment (dotted). We use the 1992 Census of Manufactures micro data. See Table 4 for a detailed description of the data construction. 1 2 3 4 5 6 7 8 9 10 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Asset Deciles Fraction Total Rental Payments as Percent . . .
. . .  3 4 0 0.5 1 Internal Funds Investment 1 2 3 4 0 50 100 Internal Funds Leased Capital (%) 1 2 3 4 0 50 100 Internal Funds Optimal Collateralization (%) 1 2 3 4 -0.4 -0.2 0 0.2 Internal Funds Explicit and Implicit Debt 1 2 3 4 0 50 100 Internal Funds Debt to Assets (%) 1 2 3 4 0 0.5 1 Internal Funds Multiplier on Borrowing Constr. Leased Capital Owned Capital Capital Tech. 1 Capital Tech. 2 44 Page 45 Figure 3: Ratio of Rental Payments to Total Payments for Capital Services Across Asset Deciles Fraction . . .
. . .  suppliers with market power may offer trade credit to be able to price discriminate, and Burkart, Ellingsen, and Giannetti (2005) for a recent survey of theories and empirical evidence as well as the papers cited therein. 26 Page 27 repossession and debt capacity incentives for leasing vis-`a-vis the tax incentives. The importance of financing constraints for leasing has implications for several key aspects of corporate finance. First, the fraction of the capital stock which is leased, in particular under . . .
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