Good cop, bad cop: Complementarities between debt and equity in disciplining management ¬リニ
نویسندگان
چکیده
In this paper we demonstrate an inherent conict that can arise in a rm between inducing ex ante e¢ cient monitoring and liquidation decisions by outside claimholders. This tension arises because the choice of liquidation decision when rm prospects are uncertain will inuence incentives for monitoring to produce information about rm prospects. We show that when high levels of outside monitoring are desirable in order to induce managerial e¤ort, it can be useful to follow an ine¢ cient liquidation policy, because this will provide greater incentives for the monitor. This result in turn has implications for rm capital structure: the quantity of information generated about rm prospects and hence rm value can be improved by splitting a rms cash ow into a safeclaim (debt) and a riskyclaim (equity) rather than selling a single claim, precisely because of the ex post conicts of interest between claimholders that this creates. This generates a partial answer to the puzzle raised by Tirole (2001) as to why rms issue multiple securities when this leads to ex post conicts of interest. Keywords: Debt, Equity, Soft Budget Constraint, Monitoring. JEL Classi cation: D82, G3
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تاریخ انتشار 2007