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The Political Economy of Dominant Investors
Perotti, Enrico C.; von Thadden, Ernst-Ludwig - 2004
We allow the preference of a political majority to determine boththe corporate governance structure and the division of profits betweenhuman and financial capital. In a democratic society where financialwealth is concentrated, a political majority may prefer to restraingovernance by dispersed...
Persistent link: https://www.econbiz.de/10010325240
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Decision Making in Incomplete Markets with Ambiguity -- A Case Study of a Gas Field Acquisition
Zhao, Lin; van Wijnbergen, Sweder - 2014
consistently underestimate the value of project flexibility and in general lead to overly conservative investment decisions in the …
Persistent link: https://www.econbiz.de/10010491370
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An Analysis of the Effects of the Severance Payment Reform on Credit to Italian SMEs
Calcagno, Riccardo; Kraeussl, Roman; Monticone, Chiara - 2008
We study the effects of the reform of the system of severance payments (TFR) of Italian employees on the cost and the access to credit for small and medium-size enterprises (SMEs). The most direct consequence of the reform is to reduce in the long run the amount of liquid assets available to...
Persistent link: https://www.econbiz.de/10010325713
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A Real Options Perspective on R&D Portfolio Diversification
van Bekkum, Sjoerd; Pennings, Enrico; Smit, Han - 2007
This paper shows that the presence of conditional staging in R&D (Research & Development) has a critical impact on portfolio risk, and changes diversification arguments when a portfolio is constructed. When R&D projects exhibit option-like characteristics, correlation between projects plays a...
Persistent link: https://www.econbiz.de/10010326068
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A Real Option Perspective on Valuing Gas Fields
Zhao, Lin; van Wijnbergen, Sweder - 2013
Real option theory has remained a fringe field; practitioners believe it is not practically applicable in complex real world environments. We show that this view is mistaken. We apply real option theory to a highly complex energy problem with unhedgeable risk, time varying volatilities and...
Persistent link: https://www.econbiz.de/10010326318
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Turbulence, Flexibility and Performance of the Long-lived Small Firm
Power, Bernadette; Reid, Gavin C - 2003
quality of start-ups. The basic hypothesis is that flexibility enhances the long run prospects of the small firm. This is … in Scotland. New measures of flexibility and turbulence are used to explain the performance of mature small firms. These … 28 distinct attributes.Econometric estimates are reported on the relationship between flexibility, turbulence and …
Persistent link: https://www.econbiz.de/10010324750
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Disagreement and Flexibility: A Theory of Optimal Security Issuance and Capital Structure
Boot, Arnoud W.A.; Thakor, Anjan V. - 2003
In this paper we introduce flexibility as an economic concept and apply it to the firm’ssecurity issuance decision and … capital structure choice. Flexibility is the ability to makedecisions that one thinks are best even when others disagree. The … without being blocked by dissenters. The amount of flexibility management has atany point in time depends on how the firm is …
Persistent link: https://www.econbiz.de/10010324789
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The Economic Value of Flexibility when there is Disagreement
Boot, Arnoud W.A.; Thakor, Anjan V. - 2003
We develop an economic theory of “flexibility”, which we interpret as the discretion orability to make a decision that … others disagree with. We show that flexibility is essentiallyan option for the decisionmaker, and can be valued as such. The … correlated with the opinions of others who may be able to impede the decision.We argue that flexibility drives economic decisions …
Persistent link: https://www.econbiz.de/10010324837
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Rhineland exit?
Bovenberg, Lans; Teulings, Coen N. - 2007
We argue in favour of the shareholder model of the firm for three main reasons. First, serving multiple stakeholders leads to ill-defined property rights. What sounds like a fair compromise between stakeholders can easily evolve in a permanent struggle between the stakeholders about the ultimate...
Persistent link: https://www.econbiz.de/10010325305
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Corporate Governance and Leverage: Evidence from a Natural Experiment
Arping, Stefan; Sautner, Zacharias - 2010
We argue that the recent corporate governance reform in the Netherlands provides a natural experiment to explore the impact of changes in corporate governance on financing policy. We find that, relative to a control sample of comparable firms outside the Netherlands, Dutch firms significantly...
Persistent link: https://www.econbiz.de/10010325946