Static trade off theory wikipedia
static trade-off framework, without recapitalization costs, the company is expected to weigh the benefit from tax relief against the increased bankruptcy risk that comes with leverage. In any period of time the company will obtain an optimal capital structure, resulting from a value maximizing trade-off between these two factors. (Myers 1984) New trade theory (NTT) is a collection of economic models in international trade which focuses on the role of increasing returns to scale and network effects, which were developed in the late 1970s and early 1980s.. New trade theorists relaxed the assumption of constant returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries