Investing in a relationship
نویسنده
چکیده
A principal can make an investment anticipating a repeated relationship with an agent, but the agent may appropriate the returns through ex post bargaining. I study how this holdup problem and efficiency depend on the contracting environment. When investment returns are observable, informal contracts ex post can be more efficient than formal contracts, as they induce higher investment ex ante: the principal invests not only to generate direct returns, but also to improve relational incentives. Unobservability of returns increases the principal’s ability to appropriate the returns but reduces her ability to improve incentives. The optimal information structure depends on bargaining power.
منابع مشابه
Bank Credits and Investment Growth of Agricultural Sector in Iran
This study were examined relationship between bank credits and investment growth of agricultural sector in Iran during the period of 1982-2011 by auto regressive distribution lag bounds test approach. Basically, the growth investing of the agricultural sector in Iran is related to oil revenues, bank credits, value added of agriculture sector and capital stock. The results confirm the existence ...
متن کاملEffects of R&D spending and Spill-Over on Agricultural TFP in Iran
Investing in research and development spending (R&D) affects total factor productivity (TFP).Recently new theories of economic growth have emphasized the relationship between R&D and TFPand also identified a number of channels through which a country’s R&D affects TFP of its tradepartner. This study seeks to estimate the effect of agricultural R&D and education spending and someother factors on...
متن کاملComplex Risk Analysis of Investing in Agriculture ETFs
The aim of the paper is to present a complex risk analysis of investing in agriculture Exchange Trade Funds (ETFs). The specific characteristics of agricultural investments should be taken into account as from the direct financial investments into agricultural ETFs, as for the general portfolio approach applying. To achieve the objectives of the work, the authors structured agriculture ETFs int...
متن کاملTobin’s Q Model and Cash Flows from Operating and Investing Activities in Listed Companies in Iran
Tobin’s Q model is one of the economic models for evaluation of companies, proposed by Tobin in 1968 and represents the ratio of the market value of the companies’ shares plus the book value of its debts to the book value of its assets. It seems that one reason for the difference in abilities of the above said companies to produce cash from operating and investing activities. Therefore this res...
متن کاملInflation Hedging in Defined Contribution Pension plan by Investing in Tehran Stock-Exchange
Due to pension fund problems in Iran, the multi-pillar social insurance system has been released in 2017. According to this, the first pillar is regarding to low income groups and finance through the public fund. The second pillar is defined benefit and finance pay as you go. The third pillar is defined contribution and fully funded finance. Contributions are transferred to the individual accou...
متن کامل