Structural Models and Endogeneity in Corporate Finance

  title={Structural Models and Endogeneity in Corporate Finance},
  author={JEFFREY L. COLES and Michael Lemmon and J. FELIX MESCHKE},
First, we specify a structural value-maximizing model of the firm, calibrate the exogenous parameters of the model to data, and show that the model and estimated productivity parameters explain the hump-shaped relation between managerial ownership and firm performance (e.g., McConnell and Servaes (1990), Morck, Shleifer, and Vishny (1988)). In addition, we… CONTINUE READING