SSRN-Modigliani and Miller Meet Chandler: Organizational Complexity and Capital Structure by Alberto Manconi, Massimo Massa

In a new working paper, Manconi and Massa (a new M&M) show that firms with more complex structures (and hence more opaque) rely less on equity financing.Why? Probably (like Myers and Majluf's 1984 pecking order paper), the debt financing comes with better investor protections and if investors are not sure of what they are getting, this protection is more valuable.SSRN-Modigliani and Miller Meet