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| Na Zhang |
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| ''Leasing and business cycles'' |
| ( 2018, Vol. 38 No.1 ) |
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| This paper demonstrates that leasing, one of the most important sources of external finance, is countercyclical over business cycles. Leasing is easier to finance and provides operational flexibility, although it costs more in the long run. The benefits of leasing are particularly important to firms with financial constraints and high uncertainty. Also, firms face tighter financing conditions and higher uncertainty during recessions. Therefore, leasing is more attractive during recessions than booms. |
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| Keywords: Leasing, capital structure, firm financing, business cycles |
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
G3 - Corporate Finance and Governance: General |
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| Manuscript Received : Jul 28 2017 | | Manuscript Accepted : Feb 09 2018 |
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