Plausibly Exogenous [1903] - Firm Leverage (04/19/2025)

LHS Variable
Financial distress

RHS Variable
Firm leverage

Source of Exogenous Variation
Private equity-sponsored dividend recapitalizations, where companies take on debt to pay investor returns, and opportunistic responsiveness to credit supply permits a causal design

- Bhardwaj, Gupta, and Howell (2025), “Capital Structure & Firm Outcomes: Evidence from Dividend Recapitalizations in Private Equity”