Optimal leverage and aggregate investment

• 成果类型: Article; Proceedings Paper
• 署名作者: Biais, B; Casamatta, C
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00147
• 发表日期: 1999
• 页码: 1291-1323
• 关键词: capital structure; financial intermediation; AGENCY COSTS; debt; CONTRACTS; BEHAVIOR; POLICY; cycles

摘要

We analyze the optimal financing of investment projects when managers must exert unobservable effort and can also switch to less profitable riskier ventures. Optimal financial contracts can be implemented by a combination of debt and equity when the risk-shifting problem is the most severe while stock options are also needed when the effort problem is the most severe. Worsening of the moral hazard problems leads to decreases in investment and output at the macroeconomic level. Moreover, aggregate leverage decreases with the risk-shifting problem and increases with the effort problem.