Dynamic Contract Theory of Capital Formation and Managerial Replacement

Research Project

Project/Area Number	26380236
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Multi-year Fund
Section	一般
Research Field	Economic theory
Research Institution	Kyoto University
Principal Investigator	Osano Hiroshi 京都大学, 経済研究所, 教授 (90152462)
Project Period (FY)	2014-04-01 – 2017-03-31
Project Status	Completed (Fiscal Year 2016)
Budget Amount *help	¥3,510,000 (Direct Cost: ¥2,700,000、Indirect Cost: ¥810,000) Fiscal Year 2016: ¥1,170,000 (Direct Cost: ¥900,000、Indirect Cost: ¥270,000) Fiscal Year 2015: ¥1,170,000 (Direct Cost: ¥900,000、Indirect Cost: ¥270,000) Fiscal Year 2014: ¥1,170,000 (Direct Cost: ¥900,000、Indirect Cost: ¥270,000)
Keywords	経営者交代 / 投資 / トービンのQ / 連続時間契約理論 / 連続時間契約モデル / トービンのＱ / コーポレート・ガバナンス / 経営者報酬
Outline of Final Research Achievements	In this research, I explore a dynamic theory of investment and costly managerial turnover assuming not only agency conflicts between the firm manager and investors, but also the limited commitment of investors to the firm's manager-replacement policy. I incorporate the possibility of the successive discretionary replacement of managers until the firm is finally liquidated, and develop a continuous-time agency model using the q-theory of investment. I derive the joint dynamics of the average q, marginal q, and optimal investment--capital ratios involved in manager turnover.