@article{Stomper:274704,
      recid = {274704},
      author = {Stomper, Alex and VierÃÿ, Marie-Louise},
      title = {Risk is Risk?},
      address = {2017-01},
      number = {2110-2018-4514},
      series = {Working Paper No. 1378},
      pages = {30},
      year = {2017},
      abstract = {We analyze the relation between firms' exposure to  exogenous business risk and their financing choices, based  on a sample of firms for which we can measure such  exposure. The results show that firms more exposed to  exogenous risk use less debt financing. We also analyze the  relation between the volatility of the firms'  returns-on-assets, and their use of debt financing. The  result is the opposite of that obtained for exogenous risk:  we find a positive relationship between debt financing and  the risk of firms. Overall, our results show that different  types of risk are associated with different financing  choices. While exogenous risk causes firms to use less debt  financing, debt financing causes firms to take risk  endogenously. This result explains contradictory findings  regarding the relation between risk and debt financing in  the prior literature.},
      url = {http://ageconsearch.umn.edu/record/274704},
      doi = {https://doi.org/10.22004/ag.econ.274704},
}