Presidential Address: Collateral and Commitment

• 成果类型: Article
• 署名作者: Demarzo, Peter M.
• 署名单位: Stanford University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12782
• 发表日期: 2019
• 页码: 1587-1619
• 关键词: capital structure; RISK-MANAGEMENT; AGENCY COSTS; debt; benefits; leverage

摘要

Optimal dynamic capital structure choice is fundamentally a problem of commitment. In a standard trade-off setting with shareholder-debtholder agency conflicts, full commitment counterfactually predicts the firm would rely almost exclusively on debt financing. Conversely, absent commitment a Modigliani-Miller-like value irrelevance and policy indeterminacy result holds. Thus, the content of dynamic trade-off theory must depend on the commitment technology. In this context, collateral is valuable as a low-cost commitment device. Because ex ante optimal commitments are likely to be suboptimal ex post, observed capital structure dynamics will exhibit hysteresis and depart significantly from standard predictions.