Corporate Investments, Managerial Incentives and Theory of the Firm PDF Download

Author: Anup Agramal
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 50

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Author: Amir Barnea
Publisher: Prentice Hall
ISBN:
Category : Business & Economics
Languages : en
Pages : 184

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Author: Mieszko Mazur
Publisher:
ISBN:
Category :
Languages : en
Pages : 40

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Book Description
This paper provides evidence that CEO incentive pay mediates the effect of family preferences on corporate investment policy. Our study focuses on the option portfolio volatility sensitivity vega, which motivates the risk-taking behavior of undiversified managers. After controlling for factors that affect incentive pay and investment policy simultaneously, we find that one-third of underinvestment in riskier R&D projects in active family firms can be attributed to a significantly lower vega. Passive family firms allocate more capital to R&D as opposed to active family firms, and are more active in M&A deal making. In contrast to many prior studies, pay incentives and families are not associated with capital expenditures. Overall, our empirical results suggest that CEO pay incentives induce investment policy contingent on firm risk. Family CEO incentive pay manifests the family preference for lower risk, especially in firms with higher firm risk. Nonetheless, after replacing family CEOs with outside professionals, investments in both R&D and M&A increase, which is consistent with the family preference for extended investment horizons. Interestingly, such a preference seems not to be manifested in incentive pay.

Author: James Ah Chip
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 160

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Author: Nicolai J. Foss
Publisher: Taylor & Francis
ISBN: 9780415196413
Category : Business & Economics
Languages : en
Pages : 536

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Author: Richard B. McKenzie
Publisher: Oxford University Press
ISBN: 0198027990
Category : Business & Economics
Languages : en
Pages : 348

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Book Description
Incentives are the most powerful tools executives can use to improve worker performance. This is particularly true in today's empowered workplace, where incentives can ensure that workers apply their initiative toward company goals. Now, in this groundbreaking book, Richard McKenzie and Dwight Lee show how to select the right incentives and how to use them for best results. Generously illustrated with examples from business, industry, government, academia, and professional sports, this superb volume offers a comprehensive overview of incentives, both in theory and in practice, providing a wealth of ideas managers can use to get employees to work harder, smarter, and more cooperatively. Much of the book is quite eye-opening. For instance, while McKenzie and Lee recognize that money is the prime motivator, they urge managers not to overlook the power of non-monetary incentives, carefully evaluating such motivators as fringe benefits, psychological incentives, education, and training. And they examine a host of other issues, including how to take advantage of executive "overpayment" to increase profits; the limits of piece-rate and other pay-for-performance schemes; finding the right balance between current pay and a more generous pension plan; the value of tough bosses; and hostile takeovers as a form of managerial incentive. How workers are rewarded is often more important than how much they are rewarded, say the authors. The job of good managers is getting the incentives right. Managing Through Incentives shows managers how to apply proven motivators to help any size firm energize the work force, increase its profits, and meet the awesome challenges of today's fiercely competitive global economy.

Author: Francisco Covas
Publisher:
ISBN:
Category :
Languages : en
Pages : 118

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Author: Jean Tirole
Publisher: Princeton University Press
ISBN: 1400830222
Category : Business & Economics
Languages : en
Pages : 657

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Book Description
"Magnificent."—The Economist From the Nobel Prize–winning economist, a groundbreaking and comprehensive account of corporate finance Recent decades have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations—equity, debt, and valuation—today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of. Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics. Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions. Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.

Author: David A. Hirshleifer
Publisher:
ISBN:
Category :
Languages : en
Pages : 40

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A manager who wants to be viewed favorably has an incentive to advance or delay the arrival of information about his firm's profitability. In the model, a high ability manager tries to advance resolution of a likely-favorable outcome, while a low ability manager may defer resolution. Such manipulation of information arrival causes greater investment in execution projects (which tend to resolve early) than exploratory projects (which tend to resolve late), and affects investment in hastening or retarding project resolution. In contrast with previous literature, in some cases managers may secretly overinvest. The model offers empirical implications about innovative versus conventional investments, associated stock price reactions, and corporate control. The theory also implies a perverse sorting of high ability managers to conventional activities and low ability managers to visionary enterprises.

Author: Günter Fandel
Publisher: Springer Science & Business Media
ISBN: 9783540405092
Category : Business & Economics
Languages : en
Pages : 664

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Book Description
The authors analyse the New Economy from a scientific point of view. The success and the failure of enterprises of the new economy form a challenge to the modern business management and to the theory of the firm. This conference transcript answers the question in which way well-established concepts of the theory of the firm should be modified or new approaches should be created, in order to run enterprises of the new economy successfully. The discussion includes various fields of the theory of the firm and is therefore divided into the six essential disciplines of economic research, which are Production and Procurement, Finance, Marketing, Accounting, Human Resource Management and Economic Organization and Corporate Governance. The international orientation of the book addresses the world-wide scientific community.