Interactions of corporate financing and investment decisions: The effects of agency conflicts

• 成果类型: Article; Proceedings Paper
• 署名作者: Childs, PD; Mauer, DC; Ott, SH
• 署名单位: Southern Methodist University; University of Kentucky; University of North Carolina; University of North Carolina Charlotte
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.06.012
• 发表日期: 2005
• 页码: 667-690
• 关键词: capital structure; Stockholder-bond holder conflicts; Real options

摘要

We examine interactions between flexible financing and investment decisions in a model with stockholder-bondholder conflicts over investment policy. We find that financial flexibility encourages the choice of short-term debt thereby dramatically reducing the agency costs of under- and overinvestment. However, the reduction in agency costs may not encourage the firm to increase leverage, since the firm's initial debt level choice depends on the type of growth options in its investment opportunity set. The model has a number of testable predictions for the joint choice of leverage and maturity, and how these choices interact with a firm's growth opportunities. (c) 2005 Elsevier B.V. All rights reserved.