Firms Contracts and Financial Structure

by Oliver Hart

This book provides a framework for thinking about economic instiutions such as firms.

Firms Contracts and Financial Structure

Author: Oliver Hart

Publisher: Clarendon Press

ISBN: 019160688X

Page: 240

View: 462

This book provides a framework for thinking about economic instiutions such as firms. The basic idea is that institutions arise in situations where people write incomplete contracts and where the allocation of power or control is therefore important. Power and control are not standard concepts in economic theory. The book begins by pointing out that traditional approaches cannot explain on the one hand why all transactions do not take place in one huge firm and on the other hand why firms matter at all. An incomplete contracting or property rights approach is then developed. It is argued that this approach can throw light on the boundaries of firms and on the meaning of asset ownership. In the remainder of the book, incomplete contacting ideas are applied to understand firms' financial decisions, in particular, the nature of debt and equity (why equity has votes and creditors have foreclosure rights); the capital structure decisions of public companies; optimal bankruptcy procedure; and the allocation of voting rights across a company's shares. The book is written in a fairly non-technical style and includes many examples. It is aimed at advanced undergraduate and graduate students, academic and business economists, and lawyers as well as those with an interest in corporate finance, privatization and regulation, and transitional issues in Eastern Europe, the former Soviet Union, and China. Little background knowledge is required, since the concepts are developed as the book progresses and the existing literature is fully reviewed.

Capital Structure and Firm Performance

by Arvin Ghosh

Hart, O., 1995, Firms, Contracts and Capital Structure, Oxford: Oxford University
Press. Jensen, M.C., and William H. Meckling, 1976, “Theory of the Firm:
Managerial Behavior, Agency Costs and Ownership Structure,” Journal of
Financial ...

Capital Structure and Firm Performance

Author: Arvin Ghosh

Publisher: Routledge

ISBN: 135153016X

Page: 140

View: 764

Capital structure theory is one of the most dynamic areas of finance and forms the basis for modern thinking on the capital structure of firms. Much controversy has resulted from comparisons of the theory of capital structure originally developed by Franco Modigliani and Merton Miller to real-world situations. Two competing theories have emerged over the years, the optimal capital structure theory and the pecking order theory.Arvin Ghosh begins with an overview of the controversies regarding capital structure theories, and then statistically tests both the optimal capital structure and pecking order theories. Using the binomial approach he analyzes the determinants of capital structure while discussing the role of market power in determining capital structure decisions. Ghosh probes the questions of new stock offerings and stockholders' returns, and analyzes capital structure and executive compensation. He then looks into debt financing ownership structure, and the controversal relationship between capital structure and firm profitability. Finally, he discusses the latest developments in the field of capital structure.A concise overview of a major issue in business economics and finance, this volume provides a fuller understanding of capital structure influence on the financial performance of firms, and will certainly stimulate further debate. While hundreds of scholarly articles have been written on the subject this is the first book to test competing theories against measurements of firms' performance and their underlying capital structure.

Finance

by R.A. Jarrow

To avoid technology substitution , each capital intensive firm must issue debt
obligations with a higher face value than a ... Financial structure and implicit
contracts In many cases it is advantageous for firms to enter either explicit or
implicit ...

Finance

Author: R.A. Jarrow

Publisher: Elsevier

ISBN: 9780444890849

Page: 1165

View: 519

Hardbound. The Handbook of Finance is a primary reference work for financial economics and financial modeling students, faculty and practitioners. The expository treatments are suitable for masters and PhD students, with discussions leading from first principles to current research, with reference to important research works in the area. The Handbook is intended to be a synopsis of the current state of various aspects of the theory of financial economics and its application to important financial problems. The coverage consists of thirty-three chapters written by leading experts in the field. The contributions are in two broad categories: capital markets and corporate finance.

Financial Structure and Economic Growth

by Asli Demirgüç-Kunt

long-term contracts. ... As in other countries, more profitable firms reduce
leverage and increase internal financing, while more tangible assets are
associated with less ... To extend the maturity structure, firms contract foreign
currency debt.

Financial Structure and Economic Growth

Author: Asli Demirgüç-Kunt

Publisher: MIT Press

ISBN: 9780262541794

Page: 436

View: 407

CD-ROM contains: World Bank data.

The Modern Firm

by John Roberts

“Incentive Contracts with Dispute Costs.” Stanford, CA: Stanford ... “Nokia
Corporation: Innovation and Efficiency in a High-Growth Global Firm.” Stanford,
CA: Stanford ... Firms, Contracts, and Financial Structure. Oxford: Clarendon
Press. Hart ...

The Modern Firm

Author: John Roberts

Publisher: OUP Oxford

ISBN: 019162246X

Page: 336

View: 341

Business firms around the world are experimenting with new organizational designs, changing their formal architectures, their routines and processes, and their corporate cultures as they seek to improve their current performance and their growth prospects. In the process they are changing the scope of their business operations, redrawing their organization charts, redefining the allocation of decision-making authority and responsibility, revamping the mechanisms for motivating and rewarding people, reconsidering which activities to conduct in-house and which to out-source, redesigning their information systems, and seeking to alter the shared beliefs, values and norms that their people hold. In this book, John Roberts argues that there are predictable, necessary relationships among these changes that will improve performance and growth. The organizations that are successful will establish patterns of fit among the elements of their organizational designs, their competitive strategies and the external environment in which they operate and will go about this in a holistic manner. The Modern Firm develops powerful conceptual frameworks for analyzing the interrelations between organizational design features, competitive strategy and the business environment. Written in a non-technical language, the book is nevertheless based on rigorous modeling and draws on numerous examples from eighteenth century fur trading companies to such modern firms such as BP and Nokia. Finally the book explores why these developments are happening now, pointing to the increase in global competition and changes in technology. Written by one of the world's leading economists and experts on business strategy and organization, The Modern Firm provides new insights into the changes going on in business today and will be of interest to academics, students and managers alike.

The Theory of Incentives

by Jean-Jacques Laffont

“Renegotiation and the Form of Efficient Contracts.” Annales d'Economie ... Grout,
P. (1984). “Investment and Wages in the Absence of Binding Contracts: A Nash
Bargaining Approach. ... Firms Contracts and Financial Structure. Oxford: Oxford
 ...

The Theory of Incentives

Author: Jean-Jacques Laffont

Publisher: Princeton University Press

ISBN: 9781400829453

Page: 440

View: 416

Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.

Economic Studies on Food Agriculture and the Environment

by Agriculture Joint Minnesota-Padova Conference on Food, and the Environment (7th : 2001 : Bologna Italy)

Oliver Hart's Firms, Contracts, and Financial Structure provides a concise
introduction to property rights theory and its application to determining firm
boundaries and selecting an appropriate financial structure for a firm. Earlier
papers by ...

Economic Studies on Food Agriculture and the Environment

Author: Agriculture Joint Minnesota-Padova Conference on Food, and the Environment (7th : 2001 : Bologna Italy)

Publisher: Springer Science & Business Media

ISBN: 9780306472428

Page: 369

View: 827

This book contains a selection of the papers presented at the Joint Conference on Food, Agriculture, and the Environment, organized by the University of Minnesota and several universities in Italy, and held in Bologna, Italy, on June 12-14, 2001. The papers are grouped into four sections: a) food, nutrition, and quality, b) land and resource assessment, c) agriculture and rural development, and d) environment and markets. Readers will benefit from the analysis provided in the papers and will gain new insights concerning alternative approaches to dealing with important policy issues.

The Political Economy of the Company

by John Parkinson

The twentieth century witnessed a switch in the ownership and management of
the firm in the United Kingdom. ... O Hart, Firms, Contracts and Financial Structure
(Oxford, Clarendon Press, 1995) and “Corporate Governance: Some Theory and
 ...

The Political Economy of the Company

Author: John Parkinson

Publisher: Bloomsbury Publishing

ISBN: 1847312349

Page: 256

View: 202

Theoretical writing on the company and company law has been dominated in recent years by economics. This collection of essays by a distinguished team of authors drawn from a variety of disciplines seeks to build on the insights of this economic analysis and broaden understanding by examining the company in a wider historical,legal, political, and sociological context. Issues discussed include the attitudes of political parties in the UK to the company, the rise of the non-executive director, institutional activism and stakeholder protection, and the evolution of the nexus of contracts theory of the company. There is also a strong comparative theme, with discussions of the political and sociological context of corporate governance in France, Germany, and Japan, together with developments at the European level.

Global Production

by Pol Antràs

Global Production is the first book to provide a fully comprehensive overview of the complicated issues facing multinational companies and their global sourcing strategies.

Global Production

Author: Pol Antràs

Publisher: Princeton University Press

ISBN: 0691209030

Page: 336

View: 884

Global Production is the first book to provide a fully comprehensive overview of the complicated issues facing multinational companies and their global sourcing strategies. Few international trade transactions today are based on the exchange of finished goods; rather, the majority of transactions are dominated by sales of individual components and intermediary services. Many firms organize global production around offshoring parts, components, and services to producers in distant countries, and contracts are drawn up specific to the parties and distinct legal systems involved. Pol Antràs examines the contractual frictions that arise in the international system of production and how these frictions influence the world economy. Antràs discusses the inevitable complications that develop in contract negotiation and execution. He provides a unified framework that sheds light on the factors helping global firms determine production locations and other organizational choices. Antràs also implements a series of systematic empirical tests, based on recent data from the U.S. Customs and Census Offices, which demonstrate the relevance of contractual factors in global production decisions. Using an integrated approach, Global Production is an excellent resource for researchers, graduate students, and advanced undergraduates interested in the inner workings of international economics and trade.

A Game Theory Analysis of Options

by Alexandre C. Ziegler

This is the unique contribution of the thesis of Dr. Alexandre Ziegler. Benefiting from the analytical tractability of contin uous time models and the closed form valuation models for derivatives, Dr.

A Game Theory Analysis of Options

Author: Alexandre C. Ziegler

Publisher: Springer Science & Business Media

ISBN: 9783540206682

Page: 176

View: 414

Modern option pricing theory was developed in the late sixties and early seventies by F. Black, R. e. Merton and M. Scholes as an analytical tool for pricing and hedging option contracts and over-the-counter warrants. How ever, already in the seminal paper by Black and Scholes, the applicability of the model was regarded as much broader. In the second part of their paper, the authors demonstrated that a levered firm's equity can be regarded as an option on the value of the firm, and thus can be priced by option valuation techniques. A year later, Merton showed how the default risk structure of cor porate bonds can be determined by option pricing techniques. Option pricing models are now used to price virtually the full range of financial instruments and financial guarantees such as deposit insurance and collateral, and to quantify the associated risks. Over the years, option pricing has evolved from a set of specific models to a general analytical framework for analyzing the production process of financial contracts and their function in the financial intermediation process in a continuous time framework. However, very few attempts have been made in the literature to integrate game theory aspects, i. e. strategic financial decisions of the agents, into the continuous time framework. This is the unique contribution of the thesis of Dr. Alexandre Ziegler. Benefiting from the analytical tractability of contin uous time models and the closed form valuation models for derivatives, Dr.

Private Equity

by Douglas Cumming

Institutions and syndication sizein international venture capital investments.
Working Paper. Hart, Oliver.1995. Firms, contracts, and financial structure. New
York:Oxford University Press. Hochberg, Yael, Alexander Ljungqvist, and Yang
Lu.

Private Equity

Author: Douglas Cumming

Publisher: John Wiley and Sons

ISBN: 9780470579558

Page: 608

View: 880

A comprehensive look at the private equity arena With private equity differing from other asset classes, it requires a whole new approach for those trained in more traditional investments such as stocks and bonds. But with the right guidance, you can gain a firm understanding of everything private equity has to offer. This reliable resource provides a comprehensive view of private equity by describing the current state of research and best practices in this arena. Issues addressed include the structure of private equity funds and fundraising, the financial and real returns of private equity, and the structure of private equity investments with investees, to name a few. Discusses the role of private equity in today's financial environment Provides international perspectives on private equity Details the regulation of private equity markets Filled with in-depth insights and expert advice, this book will provide you with a better understanding of private equity structures and put you in a better position to measure and analyze their performance.

Bargaining Power Effects in Financial Contracting

by Kai Rudolph

Since financial contracting is quite a broad field of research, see, e. g., Hart (2001
) for a recent review, we focus on the in ... of financial contracting where firm's
capital structure is used as a bargaining device, i. e. the firm's capital structure is
 ...

Bargaining Power Effects in Financial Contracting

Author: Kai Rudolph

Publisher: Springer Science & Business Media

ISBN: 3540344969

Page: 342

View: 660

The primary objective of this book is to demonstrate that a firm's financing decisions depend among other things on bargaining power considerations, and to illustrate potential causes for this dependency. Based on a principal-agent analysis where a lender (principal) and a firm (agent) bargain over the financing of the firm’s risky project, the author illustrates and analyzes the importance of bargaining power on finance decisions.

Financial Structures and Economic Development

by Ross Levine

An important challenge to economists is to explain how financial contracts and
institutions affect economic growth while simultaneously ... Financial structures
that mitigate liquidity and productivity risk make firm investment more attractive.

Financial Structures and Economic Development

Author: Ross Levine

Publisher: World Bank Publications

ISBN:

Page: 39

View: 273

Non-technical summary; The model; Risk and transactions costs; Financial intermediaries: researcher/mobilizer.

Feminist Economics Today

by Marianne A. Ferber

Firms , contracts , and financial structure . Oxford : Clarendon Press . Held ,
Virginia . 2002 . Care and the extension of markets . Hypatia 17 ( 2 ) : 19 – 33 .
Himmelweit , Susan . 1999 . Caring labor . In Emotional labor in the service
economy ...

Feminist Economics Today

Author: Marianne A. Ferber

Publisher: University of Chicago Press

ISBN: 9780226242064

Page: 209

View: 734

The 1993 publication of Marianne A. Ferber and Julie A. Nelson's Beyond Economic Man was a landmark in both feminist scholarship and the discipline of economics, and it quickly became a handbook for those seeking to explore the emerging connections between the two. A decade later, this book looks back at the progress of feminist economics and forward to its future, offering both a thorough overview of feminist economic thought and a collection of new, high-quality work from the field's leading scholars.

The Capital Structure Paradigm

by Zane Swanson

Perhaps a capital structure survey could be conducted over the Web in a way that
would reduce non-respondent bias. ... explain capital structure by postulating that
the firm is a nexus not only of explicit contracts but also of implicit contracts ...

The Capital Structure Paradigm

Author: Zane Swanson

Publisher: Greenwood Publishing Group

ISBN: 9781567206166

Page: 237

View: 577

Provides a comprehensive framework for examining debt/equity decisions.

Capital Structure and Corporate Financing Decisions

by H. Kent Baker

This timely guide contains a wealth of information that will allow you to understand the factors that influence capital structure and financing decisions, and put you in a better position to effectively use these insights in real-world ...

Capital Structure and Corporate Financing Decisions

Author: H. Kent Baker

Publisher: John Wiley & Sons

ISBN: 0470569522

Page: 504

View: 832

A comprehensive guide to making better capital structure and corporate financing decisions in today's dynamic business environment Given the dramatic changes that have recently occurred in the economy, the topic of capital structure and corporate financing decisions is critically important. The fact is that firms need to constantly revisit their portfolio of debt, equity, and hybrid securities to finance assets, operations, and future growth. Capital Structure and Corporate Financing Decisions provides an in-depth examination of critical capital structure topics, including discussions of basic capital structure components, key theories and practices, and practical application in an increasingly complex corporate world. Throughout, the book emphasizes how a sound capital structure simultaneously minimizes the firm's cost of capital and maximizes the value to shareholders. Offers a strategic focus that allows you to understand how financing decisions relates to a firm's overall corporate policy Consists of contributed chapters from both academics and experienced professionals, offering a variety of perspectives and a rich interplay of ideas Contains information from survey research describing actual financial practices of firms This valuable resource takes a practical approach to capital structure by discussing why various theories make sense and how firms use them to solve problems and create wealth. In the wake of the recent financial crisis, the insights found here are essential to excelling in today's volatile business environment.

Capital Structure Decisions

by Yamini Agarwal

Such instruments support only the passive and value-added risk of a firm. Off—
balance sheet capital is beyond the use of such instruments. It uses contingent
claims on financial contracts to support investments in fixed assets, ...

Capital Structure Decisions

Author: Yamini Agarwal

Publisher: John Wiley & Sons

ISBN: 111820316X

Page: 224

View: 444

Inside the risk management and corporate governance issues behind capital structure decisions Practical ways of determining capital structures have always been mysterious and riddled with risks and uncertainties. Dynamic paradigm shifts and the multi-dimensional operations of firms further complicate the situation. Financial leaders are under constant pressure to outdo their competitors, but how to do so is not always clear. Capital Structure Decisions offers an introduction to corporate finance, and provides valuable insights into the decision-making processes that face the CEOs and CFOs of organizations in dynamic multi-objective environments. Exploring the various models and techniques used to understand the capital structure of an organization, as well as the products and means available for financing these structures, the book covers how to develop a goal programming model to enable organization leaders to make better capital structure decisions. Incorporating international case studies to explain various financial models and to illustrate ways that capital structure choices determine their success, Capital Structure Decisions looks at existing models and the development of a new goal-programming model for capital structures that is capable of handling multiple objectives, with an emphasis throughout on mitigating risk. Helps financial leaders understand corporate finance and the decision-making processes involved in understanding and developing capital structure Includes case studies from around the world that explain key financial models Emphasizes ways to minimize risk when it comes to working with capital structures There are a number of criteria that financial leaders need to consider before making any major capital investment decision. Capital Structure Decisions analyzes the various risk management and corporate governance issues to be considered by any diligent CEO/CFO before approving a project.

The Ownership of Enterprise

by Henry HANSMANN

Explores the reasons for the diverse pattern of ownership in America. This book explains why different industries and national economies exhibit different distributions of ownership forms.

The Ownership of Enterprise

Author: Henry HANSMANN

Publisher: Harvard University Press

ISBN: 9780674001718

Page: 372

View: 423

Explores the reasons for the diverse pattern of ownership in America. This book explains why different industries and national economies exhibit different distributions of ownership forms.