Dynamic Contract Theory of Capital Formation and Managerial Replacement

2016 Fiscal Year Final Research Report

• 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
• Keywords: 経営者交代 / 投資 / トービンのQ / 連続時間契約理論

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.

Free Research Field

金融契約理論、コーポレート・ファイナンス