We examine the design of control rights of external financiers and how these interact with the firm's security issuance and capital structure when the firm's initial owners and manager may disagree with new investors over project choice. The first main result is an ex ante managerial preference...

We analyze a publicly-traded firm's decision to stay public or go private when managerial autonomy from shareholder intervention affects the supply of productive inputs by management. We show that both the advantage and the disadvantage of public ownership relative to private ownership lie in...