Agency Costs Asset Specificity And The Capital Structure Of The Firm
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Author | : Jon Vilasuso |
Publisher | : |
Total Pages | : |
Release | : 2001 |
Genre | : |
ISBN | : |
We develop a dynamic model that incorporates the insights of both the agency cost and asset specificity literature aboutcorporate finance. In general, we find that neither can be ignored, and that the optimal capital structure minimizes agency cost and asset specificity considerations. A key finding is that the conditions most favorable for reducing transaction costs due to asset specificity are the same as those for reducing the agency costs of debt. Empirically, we find that agency costs and asset specificity are significant determinants of a firm's capital structure in the transportation equipment and the printing and publishing industries.
Author | : Yitsḥaḳ Yaʻaḳov Fuḳs |
Publisher | : |
Total Pages | : 348 |
Release | : 1993 |
Genre | : |
ISBN | : |
Author | : Oliver E. Williamson |
Publisher | : Edward Elgar Publishing |
Total Pages | : 0 |
Release | : 2013 |
Genre | : Industrial organization (Economic theory). |
ISBN | : 9780857938756 |
Transaction cost economics has and continues to be a fruitful area of research. There is still much to be done in the field with past research being used in conjunction with the vast number of contractual phenomena that have yet to be investigated in transaction cost economics terms. New challenges are posed by the need to move beyond the design of new contractual instruments (such as financial derivatives) to include an examination of the lurking hazards that attend contract implementation.
Author | : Srinivasan Balakrishnan |
Publisher | : |
Total Pages | : |
Release | : 1991 |
Genre | : |
ISBN | : |
Author | : Ronald W. Masulis |
Publisher | : |
Total Pages | : 168 |
Release | : 1988 |
Genre | : Business & Economics |
ISBN | : |
Author | : Richard E. Caves |
Publisher | : Harvard University Press |
Total Pages | : 468 |
Release | : 1980 |
Genre | : Business & Economics |
ISBN | : 9780674154254 |
With the nations of the world becoming more interdependent, it is imperative to take international influences into account in understanding the organization of industry within a country. This book extends the structure/conduct/performance framework of analysis to present a fully specified simultaneous equation model of an open economy--Canada. By estimating a system of equations of all the major variables, the authors can identify which variables are dependent and which are independent. They are thus able to assess the relative importance of such factors as seller concentration, import competition, retailing structure, advertising expenditure, research and development spending, and technical and allocative efficiency in shaping the organization of industry in Canada. In addition, using both industry-level and firm-level data, the authors develop methods for assessing the effect of structural variables on diversification strategies and the consequences for market performance. They also study the effects of such variables on firms' access to capital markets. The book concludes with a discussion of the implications of the findings for government policy.
Author | : Michael C. Jensen |
Publisher | : Harvard University Press |
Total Pages | : 342 |
Release | : 2003-09-30 |
Genre | : Business & Economics |
ISBN | : 9780674012295 |
This collection examines the forces, both external and internal, that lead corporations to behave efficiently and to create wealth. Corporations vest control rights in shareholders, the author argues, because they are the constituency that bear business risk and therefore have the appropriate incentives to maximize corporate value. Assigning control to any other group would be tantamount to allowing that group to play poker with someone else's money, and would create inefficiencies. The implicit denial of this proposition is the fallacy of the so-called stakeholder theory of the corporation, which argues that corporations should be run in the interests of all stakeholders. This theory offers no account of how conflicts between different stakeholders are to be resolved, and gives managers no principle on which to base decisions, except to follow their own preferences. In practice, shareholders delegate their control rights to a board of directors, who hire, fire, and set the compensation of the chief officers of the firm. However, because agents have different incentives than the principals they represent, they can destroy corporate value unless closely monitored. This happened in the 1960s and led to hostile takeovers in the market for corporate control in the 1970s and 1980s. The author argues that the takeover movement generated increases in corporate efficiency that exceeded $1.5 trillion and helped to lay the foundation for the great economic boom of the 1990s.
Author | : Benjamin M. Friedman |
Publisher | : University of Chicago Press |
Total Pages | : 404 |
Release | : 2009-05-15 |
Genre | : Business & Economics |
ISBN | : 0226264238 |
The research reported in this volume represents the second stage of a wide-ranging National Bureau of Economic Research effort to investigate "The Changing Role of Debt and Equity in Financing U.S. Capital Formation." The first group of studies sponsored under this project, which have been published individually and summarized in a 1982 volume bearing the same title (Friedman 1982), addressed several key issues relevant to corporate sector behavior along with such other aspects of the evolving financial underpinnings of U.S. capital formation as household saving incentives, international capital flows, and government debt management. In the project's second series of studies, presented at the National Bureau of Economic Research conference in January 1983 and published here for the first time along with commentaries from that conference, the central focus is the financial side of capital formation undertaken by the U.S. corporate business sector. At the same time, because corporations' securities must be held, a parallel focus is on the behavior of the markets that price these claims.
Author | : John Sutton |
Publisher | : MIT Press |
Total Pages | : 600 |
Release | : 1991 |
Genre | : Business & Economics |
ISBN | : 9780262193054 |
Sunk Costs and Market Structure bridges the gap between the new generation of game theoretic models that has dominated the industrial organization literature over the past ten years and the traditional empirical agenda of the subject as embodied in the structure-conduct-performance paradigm developed by Joe S. Bain and his successors.
Author | : Peter Taylor |
Publisher | : |
Total Pages | : |
Release | : 1996 |
Genre | : Finance |
ISBN | : 9781860430664 |