Why companies choose to lease instead of buy? Insights from academic literature
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| Natura: | Artículo científico |
| Lingua: | en |
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Consejo Latinoamericano de Escuelas de Administración
2013
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| _version_ | 1876478289454825472 |
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| author | Ana Isabel Morais |
| author_facet | Ana Isabel Morais |
| contents | Why companies choose to lease instead of buy? Insights from academic literature Ana Isabel Morais Administración y Contabilidad Purpose – The purpose of this paper is to review empirical research on the determinants of leasing. Design/methodology/approach – The paper reviews previous literature that has focused on studying the determinants of leasing decisions. It also discusses the determinants of the lease-buy decision and the determinants of the choice between finance leases and operating leases. Findings – Previous empirical studies show that there is no consensus as to whether debt and leases are complements or substitutes. However, there are some fa ctors that affect the choice between leases and debt, such as size, taxes, nature of assets, financial constraints and management compensation. Leases tend to be more prevalent in some industries (such as air transport , retailing and services and u tilities) than in others, and companies tend to lease assets that are less specific, of general usage and more liquid. Previous studies also show that higher leverage companies tend to use leases rather than other forms of financing. Research limitations/implications – The paper only addresses the determinants of leasing. Previous studies about leases address other areas such as the lease accounting standards and the economic consequences and valuation of leases, which are not discussed in this paper. Originality/value – The paper presents an exhaustive review of previous literature on the determinants of leasing. Evidence from research on this topic is likely to be helpful in capital market investment decisions, accounting standard setting and decisions on corporate financial disclosure. Keywords Determinants, Debt, Finance leases, Leasing, Operating leases Paper type Literature review. 2013 editorial 1012-8255 https://www.redalyc.org/articulo.oa?id=71629939006 en http://www.redalyc.org/revista.oa?id=716 Academia. Revista Latinoamericana de Administración application/pdf Consejo Latinoamericano de Escuelas de Administración Academia. Revista Latinoamericana de Administración (Perú) Num.3 Vol.26 |
| format | Artículo científico |
| id | redalyc_71629939006 |
| institution | Redalyc |
| language | en |
| publishDate | 2013 |
| publisher | Consejo Latinoamericano de Escuelas de Administración |
| spellingShingle | Why companies choose to lease instead of buy? Insights from academic literature Ana Isabel Morais Administración y Contabilidad Why companies choose to lease instead of buy? Insights from academic literature Ana Isabel Morais Administración y Contabilidad Purpose – The purpose of this paper is to review empirical research on the determinants of leasing. Design/methodology/approach – The paper reviews previous literature that has focused on studying the determinants of leasing decisions. It also discusses the determinants of the lease-buy decision and the determinants of the choice between finance leases and operating leases. Findings – Previous empirical studies show that there is no consensus as to whether debt and leases are complements or substitutes. However, there are some fa ctors that affect the choice between leases and debt, such as size, taxes, nature of assets, financial constraints and management compensation. Leases tend to be more prevalent in some industries (such as air transport , retailing and services and u tilities) than in others, and companies tend to lease assets that are less specific, of general usage and more liquid. Previous studies also show that higher leverage companies tend to use leases rather than other forms of financing. Research limitations/implications – The paper only addresses the determinants of leasing. Previous studies about leases address other areas such as the lease accounting standards and the economic consequences and valuation of leases, which are not discussed in this paper. Originality/value – The paper presents an exhaustive review of previous literature on the determinants of leasing. Evidence from research on this topic is likely to be helpful in capital market investment decisions, accounting standard setting and decisions on corporate financial disclosure. Keywords Determinants, Debt, Finance leases, Leasing, Operating leases Paper type Literature review. 2013 editorial 1012-8255 https://www.redalyc.org/articulo.oa?id=71629939006 en http://www.redalyc.org/revista.oa?id=716 Academia. Revista Latinoamericana de Administración application/pdf Consejo Latinoamericano de Escuelas de Administración Academia. Revista Latinoamericana de Administración (Perú) Num.3 Vol.26 |
| title | Why companies choose to lease instead of buy? Insights from academic literature |
| topic | Administración y Contabilidad |
| url | https://www.redalyc.org/articulo.oa?id=71629939006 |