Author: James Ah ChipPublisher:
ISBN:
Category : Corporations
Languages : en
Pages : 160
Book Description
Managerial Incentives and Corporate Investment Decisions
Author: James Ah ChipPublisher:
ISBN:
Category : Corporations
Languages : en
Pages : 160
Book Description
Managerial Incentives, Accounting for Interest Costs and Capital Investment Decisions of the Firm
Author: Ramachandran RamananPublisher:
ISBN:
Category :
Languages : en
Pages : 138
Book Description
Managerial Incentives, Corporate Investment, and Economic Performance
Author: Francisco CovasReal Options and Investment Incentives
Author: Gunther FriedlPublisher: Springer Science & Business Media
ISBN: 3540482687
Category : Business & Economics
Languages : en
Pages : 129
Book Description
This work analyzes the problem of delegated decision-making within firms when investment projects are characterized by the possibility to make subsequent decisions after the initial investment decision has been made. By analyzing this question, the monograph combines and unifies two important lines of literature: on the one hand the literature on controlling investment decisions, on the other hand the investment valuation literature.
Managerial Reputation and Corporate Investment Decisions
Author: David A. HirshleiferPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This review provides a conceptual framework for categorizing the effects of a managerial concern for short-term reputation on biases in corporate investment decisions. The incentives of managers to use investment choices as a tool for building their reputations or the reputations of their firms are examined. These incentives come in 3 main forms: 1. visibility bias, which encourages a manager to try to make short-term indicators of success look better, 2. resolution reference, which encourages managers to try to advance the arrival of good news and delay bad news, and 3. mimicry and avoidance, which encourages a manager to take the actions that the best managers are seen to do, and to avoid the actions the worst managers are seen to do. The sheer variety of possible ways of manipulating investment choices to influence reputation may seem bewildering. However, actions that are associated with rises in stock prices tend to enhance the firm's reputation.
Corporate Investments, Managerial Incentives and Theory of the Firm
Author: Anup AgramalPublisher:
ISBN:
Category : Corporations
Languages : en
Pages : 50
Book Description
A Simple Model of Managerial Incentives and Portfolio-Investment Decision
Author: Binbin DengPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
What is the optimal portfolio allocation when an agent is investing both for a firm and for himself? I address this question by solving a manager's decision problem under a specific executive compensation structure. Specifically, I study how flat wage and stock compensation affect the manager's investment decision. I show that the allocation is the same regardless of whether the manager is prohibited from trading the public shares of his own firm. Results from calibration show that the manager invests less in firm-specific technology and more in the aggregate stock market as the risk of the firm's project increases. More stock compensation discourages him from investing in the firm's risky technology, but encourages more risk-taking in terms of personal investment. In addition, I prove that flat wage, effectively as a riskless bond, hedges risk and leads to more risk-taking behavior both in firm investment and personal investment.
The Effect of Managerial Incentives to Bear Risk on Corporate Capital Structure and R&D Investment
Author: Jouahn NamPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
In this study we use estimates of the sensitivities of managers' portfolios to stock return volatility and stock price to directly test the relationship between managerial incentives to bear risk and two important corporate decisions. We find that as the sensitivity of managers' stock option portfolios to stock return volatility increases firms tend to choose higher debt ratios and make higher levels of Ramp;D investment. These results are even stronger in a sub sample of firms with relatively low outside monitoring. For these firms managerial incentives to bear risk play a particularly pivotal role in determining leverage and Ramp;D investment.
Managerial Incentives, Risk Aversion and Corporate Policy Decisions
Author: Scott McKnightPublisher:
ISBN:
Category :
Languages : en
Pages : 60
Book Description
We provide new evidence that equity incentives can have perverse effects on firm value. Conditioning the relationship between chief executive officer (CEO) incentives and the risk exposure generated by corporate policy decisions on how risk is expected to affect firm value, we find that delta encourages value-maximising investment and firm focus policy decisions, but may lead to sub-optimal financing decisions. When the goal of value-maximisation conflicts with the CEO's propensity to avoid risk, the incentive effect of delta partially offsets risk aversion. We show that while CEO incentives affect corporate policy, the firm's optimal policy also influences the compensation contract.
Agency Problems and Financial Contracting
Author: Amir BarneaPublisher: Prentice Hall
ISBN:
Category : Business & Economics
Languages : en
Pages : 184
Book Description