Results 281 to 290 of about 8,186 (320)

Competition for Procurement Contracts and Underinvestment

International Economic Review, 1990
A two-period model is considered in which ex ante identical firms invest in period one, and in period two, after they learn their costs, the lowest cost firm is chosen as the winner of the contract. It is found that even though firms are racing against one another, they end up underinvesting relative to the ex ante socially optimal levels when the ...
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Asset Revaluations and the Mitigation of Underinvestment

Abacus, 1992
Asset write‐ups or revaluations are a common feature of Australian accounting and reporting practice. This paper adopts the perspective that efficiency rather than opportunism is the reason for revaluations. It argues asset revaluations are a low‐cost mechanism for mitigating underinvestment problems induced by the presence of risky debt and ...
GREG WHITTRED, YOKE KAI CHAN
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The political economy of underinvestment in agriculture

Journal of Development Economics, 1998
Abstract Owners of sector-specific factors form political lobbies in order to influence government policy. In a closed economy, public investment in agriculture shifts the internal terms of trade against agriculture (due to Engel's law) and thereby increases the surplus of unorganized classes which cannot be appropriated by the lobbies.
Jean-Marie Baland, Ashok Kotwal
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Corporate Insurance and the Underinvestment Problem

The Journal of Risk and Insurance, 1987
A casualty loss produces option-like characteristics in assets because their value depends on further discretionary investment. With risky debt in the firm's capital structure, the shareholders can have incentives to forgo the discretionary investment, even though it has a positive net present value.
David Mayers, Clifford W. Smith
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The Underinvestment Problem and Corporate Derivatives Use

Financial Management, 1998
We analyze the underinvestment problem as a determinant of corporate hedging policy. We find evidence of a positive relation between a firm’s derivatives use and its growth opportunities, as proxied by several alternative measures. For firms with enhanced investment opportunities, derivatives use is greater when they also have relatively low cash ...
Gerald D. Gay, Jouahn Nam
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Risk Insurance and Underinvestment in Education

Studies in Economics and Finance, 1977
Introduction In recent years considerable attention has been given to the role of the State in the financing and provision of education. Public financing of education has, in particular, been widely justified on the grounds that there are external benefits from education (1).
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Corporate Insurance and the Underinvestment Problem: An Extension

The Journal of Risk and Insurance, 1989
Corporate Insurance and the Underinvestment Problem: An Extension In an insightful paper in this journal, Mayers and Smith (MS)[1] posit corporate insurance as a device to control the underinvestment problem which occurs when a firm experiences a casualty loss.
Jacques A. Schnabel, Ebrahim Roumi
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Underinvestment in European Biotechnology

2009
Why do new companies fail? We have looked briefly at aspects of management and entrepreneurship, the usual scapegoats for company failure. However, the objective evidence is that overwhelmingly companies fail through undercapitalisation.
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Public Markets and Underinvestment

2009
VC exists because it promises to invest in bright new companies and give them the cash to grow, thus generating share price rise and the chance of substantial profit on their investment. The sections above show (in rather tedious detail) that it does not do so, and that the ‘gap’ in finance in Europe is in fact a reflection of this.
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Managerial compensation and the underinvestment problem

Economic Modelling, 2011
Abstract This paper studies the effect of managerial compensation terms on the well-known “underinvestment” incentive. We extend the Mauer and Ott (2000) real-option model of corporate expansion, and show that, when the manager maximizes the value of his compensation package (rather than equity value), the underinvestment problem can be substantially
Kiridaran Kanagaretnam, Sudipto Sarkar
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