Technological Determinants of Financial Constraints

• 成果类型: Article
• 署名作者: Starmans, Jan
• 署名单位: Stockholm School of Economics
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4421
• 发表日期: 2023
• 页码: 3003-3024
• 关键词: Moral hazard; contractual constraints; constraints; INNOVATION

摘要

This paper studies the investor???s investment decision in a standard financial contracting model. The investor chooses among entrepreneurs with heterogeneous production technologies who generate different probability distributions of cash flow under effort. I provide a complete characterization of optimal contracts, agency rents, and the investor???s investment decision. Differences in entrepreneurs??? production technologies imply differences in optimal contracts and agency rents across equally productive entrepreneurs, which biases and potentially distorts the investor???s investment decision. The results provide a complete characterization of entrepreneurs??? financial constraints in the presence of heterogeneous production technologies and uncover a fundamental link between production technologies, financial contracts, and financial constraints.