Financial Contracting: A Survey of Empirical Research and Future Directions
29 Pages Posted: 12 Mar 2009
Date Written: 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.
Keywords: Financial Contracting, Security Design, Control Rights, Renegotiation
JEL Classification: G3
Suggested Citation: Suggested Citation