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Firms, contracts, and financial structure Oliver Hart
Publisher: OUP

Increasingly, boards of directors have hired CEOs outside their firm. Another concern is that the redesign of the CEO contract could be driven by the change in capital structure, not by the strong principal. But if human capital is so important, elementary property rights economics tells us that workers, not capitalists, should control firms. An interesting development of the 1980s, however, was the John Graham and Campbell Harvey (2001) surveyed chief financial officers to gather information about their perspective on the determinants of their firms' financial structure and found support for both the trade-off theory and the pecking order view. Firms, Contracts, and Financial Structure. Bond covenants exist to restrict these games that shareholders might play, but bond contracts cannot prevent all eventualities. This essay contributes to contact theory as it has been developed in economic analysis, particularly in the context of the firm. This work uses recent developments in the theory of incomplete contracts to analyze a range of topics in organization theory and corporate finance. Like: Extensive list of legal and financial experts worldwide. Second, the fund investors' claim on fund cash flow is a combination of debt and levered equity, while the general partner receives a claim similar to the carry contracts received by real-world practitioners. This paper presents a model of the financial structure of private equity firms. FIRMS CONTRACTS AND FINANCIAL STRUCTURE on English sites. In the model, the general First, the firm should be financed by a combination of fund capital raised before deals are encountered, and capital that is raised to finance a specific deal. Herbet Simon, "A Formal Theory of the Employment Relationship," Econometrica, July 1951. For those interested in the economics of contracting: Oliver Hart, Firms, Contracts and Financial Structure (1995).