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The Theory of Capital Structure
This paper surveys capital structure theories based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (but excluding tax-basedExpand
Differences of Opinion Make a Horse Race
A model of trading in speculative markets is developed based on differences of opinion among traders. Our purpose is to explain some of the empirical regularities that have been documented concerningExpand
Organization Design
This paper attempts to explain organization structure based on optimal coordination of interactions among activities by classifying the characteristics of activities and managerial costs that lead to the matrix organization, the functional hierarchy, the divisional hierarchy, or a fiat hierarchy. Expand
A Theory of Board Control and Size
We extend the traditional view of corporate boards as monitors to include a role for outside board members as suppliers of expertise or information. Indeed, both outsiders and insiders may haveExpand
Capital Structure and the Informational Role of Debt
This paper provides a theory of capital structure based on the effect of debt on investors' information about the firm and on their ability to oversee management. The authors postulate that managersExpand
A Theory of Wage Dynamics
A dynamic, equilibrium model of long term (implicit) labour contracts under incomplete but symmetric information is developed. Workers are assumed to be risk averse and of unknown ability orExpand
Corporate control contests and capital structure
Abstract This paper explores the determinants of corporate takeover methods (proxy fights versus tender offers) and their outcomes and price effects. We focus on the effect of leverage on theExpand
The Capital Budgeting Process: Incentives and Information
We study the capital allocation process within firms. Observed budgeting processes are explained as a response to decentralized information and incentive problems. It is shown that theseExpand