SIZE MATTERS: HOW OVER-INVESTMENTS RELAX LIQUIDITY CONSTRAINTS IN RELATIONAL CONTRACTS

• 成果类型: Article
• 署名作者: Englmaier, Florian; Fahn, Matthias
• 署名单位: University of Munich; Leibniz Association; Ifo Institut; Johannes Kepler University Linz
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/uez029
• 发表日期: 2019
• 页码: 3092-3106
• 关键词: internal capital-markets; corporate; overinvestment; COMPETITION

摘要

The corporate finance literature documents that managers tend to over-invest in their companies. A number of theoretical contributions have aimed at explaining this stylised fact and most have focused on a fundamental agency problem between shareholders and managers. This article shows that over-investments are not necessarily the (negative) consequence of agency problems between shareholders and managers but instead might be a second-best optimal response to address problems of limited commitment and limited liquidity. If a firm has to rely on relational contracts to motivate its workforce and if it faces a volatile environment, then investments into general, non-relationship-specific capital can increase the efficiency of a firm's labour relations.