Financial Contracting: A Survey of Empirical Research and Future Directions
Michael R. Roberts
The Wharton School - University of Pennsylvania; National Bureau of Economic Research (NBER)
University of Chicago - Booth School of Business; NBER
February 23, 2009
We review recent evidence and future directions for empirical research on financial contracting in the context of corporate finance. Specifically, we survey evidence pertaining to incentive conflicts, control rights, collateral, renegotiation, and interactions between financial contracts and other governance mechanisms. We also discuss directions for future research, concluding that the financial contracting approach offers a potentially fruitful perspective for empirical researchers seeking to better understand a variety of issues in corporate finance including capital structure, investment policy, payout policy, and corporate governance.
Number of Pages in PDF File: 29
Keywords: Financial Contracting, Security Design, Control Rights, Renegotiation
JEL Classification: G3
Date posted: March 12, 2009
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