Title

The impact of product warranties on the capital structure of Australian firms

Date of this Version

1-1-2013

Document Type

Journal Article

Publication Details

Citation only

Arqawi, B. Bertin, W.J., & Prather, L. (2013). The impact of product warranties on the capital structure of Australian firms. Australian Journal of Management.

Access the journal

2013 HERDC submission. FoR code: 150201

© Copyright, The Authors, 2013

ISSN

1327-2020

Abstract

This paper examines the impact of Australian firms’ warranty policies on capital structure. The sample consists of 378 firms and 1727 firm-years for Australian public firms for the period 2006–2010. The results suggest that warranty policies impact on Australian firms’ capital structures. Firms offering product warranties to customers have less leverage than those firms that do not. Firms commit to honour warranty contracts, whether explicit or implicit, by selecting lower leverage levels.

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This document has been peer reviewed.