The reduced form as an empirical tool: a cautionary tale from the financial veil

An analysis of the limitations of the reduced-form empirical strategy as a method of testing the Modigliani-Miller model of corporate financial structure, demonstrating that an empirical strategy that is not closely tied to an underlying economic theory of behavior will usually yield estimates that are too imprecise or too unreliable to form a basis for policy.

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Year of publication:	1996
Authors:	Craig, Ben ; Richardson, Christopher A.
Published in:	Economic Review. - Federal Reserve Bank of Cleveland. - 1996, Q I, p. 16-25
Publisher:	Federal Reserve Bank of Cleveland
Subject:	Corporations - Finance \| Investments

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005360771