Specific Human Capital, Credible Commitment and Optimal Capital Structure
نویسندگان
چکیده
In this paper, we show that although ex ante equityholders would like to adopt an optimal displacement and operating policy, they may not have incentives to implement such a policy ex post when the manager acquires firmspecific human capital and becomes indispensable to the firm’s continued operation. An optimal mix of debt and equity can serve as a commitment device in disciplining the manager. c © 2004 Peking University Press
منابع مشابه
Allocation and Taxation in Uncommitted Societies
We analyze the properties of credible equilibria in dynamic settings with privately informed agents, capital accumulation and a lack of societal commitment. We show that a lack of commitment tilts the social tradeoff between equality and incentives towards the former and has ambiguous implications for capital accumulation. We isolate forces that promote and retard capital accumulation in these ...
متن کاملUncertainty, Specificity and Institutions
We show how labour market restrictions, such as firing costs, and bail-outs may arise as useful institutions to support investment in specific human capital. The specificity of human capital is determined endogenously. While specific human capital is more productive than the general human capital, it cannot be reallocated across industries. Accordingly, the optimal fraction of individuals with ...
متن کاملEvaluate the relationship between the structure of the economy and capital market financing
The importance of developing the financial sector, followed by the development of its financing comes from the Efficient financial sector, a key role in mobilizing resources for investment, encouraging foreign capital to enter and equipment and optimize resource allocation mechanism plays And a developed financial system in a country, with financing for the real sector of the economy, creates o...
متن کاملEstimating Optimum Value of Investment and Human Capital in the R&D Sector of Iran Using an Augmented Endogenous Growth Model
This article intends to estimate the optimal value of investment and human capital in R&D sector of Iranian economy using an augmented endogenous growth model. To do so, two issues have been studied. First, an endogenous growth model has been extended to include investment in R&D as an independent variable. In the framework of this model, in order to determine the optimal value of investment an...
متن کاملعوامل مرتبط با تعهدات شهروندی
Objective: Citizens have many rights and commitments. "Citizenship commitments" induce social order and make social affairs predictable. Such a concept due to its nature and meaning holds relation with entire subjects and debates of currently human and social fields. Method: This research is a survey on citizens over the age of 18 in Tehran city. Sampling method is compound of classified a...
متن کامل