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The paper studies the impact of managerial overconfidence on corporate investments under the moral hazard framework. By assuming a fully competitive and information-transparent capital market as well as rational investors, the study finds that managerial overconfidence reduces moral hazard, but may result in over- or under-investments; the relationship between managerial overconfidence and inefficient...
As an important component part of the financial safety net, the deposit insurance system plays a unique role in protecting the medium and small depositors' profits, and maintaining the well-functioning of the financial system. China will establish a deposit insurance system as an important task of the recent financial industry. This paper from the perspective of economy, analyzes rationally of the...
Corporate governance is contingent governance. When the corporate borrowers come into financing difficulties and facing difficulties of returning the borrowing capital, banks as creditors should involve in the corporate governance and make a choice between the liquidation and the debt renegotiation. In this paper, we set up a four-time-point model to analyze the best choice of banks and conclude:...
The propagation of new technology generally has huge financing demand, and the financing is in the information asymmetry environment. Market-based financing pattern and bank-based financing pattern have different mechanisms in eliminating information asymmetry problems, and thus the efficiency to provide funds for the propagation of new technology is different. Comparing the mechanisms and efficiency...
As the main method to prevent the moral risks of the management level, the supervision is implemented by many aspects. Grounded on the basic theory of corporate finance, this paper used grey relational method to analysis the data of 1276 list companies in Shanghai and Shenzhen stock market. It explored that supervision from different executors effected the behavior selection of the management under...
Based on information asymmetry, this paper analyzes the moral hazard of developing tourism resources in China by the principal-agent theory. It links tourism revenues to the developing compensation. To solve the moral hazard, this paper designs an incentive and restrictive mechanism. Based on the model, the problems in the development are analyzed, and proposals of improving the mechanism are proposed.
The study divides the risks caused by enterprise human capital investment (EHCI) into two types: prediction risk and incentive risk, according to whether the risk reason is related to the subjectivity of the invested object or not. Then the study analyses the characteristics of the incentive risk, and sets forth the means to control the incentive risk as viewed from investment.
Agent construction system, as a new-style mode of project management, has been carried out in government investment project in recent years. The mercerization operation mode of agent construction system has considerably improved the level of project management. According to the analysis of the principle-agent relationship in government investment project, main risk and its cause of agent construction...
The asymmetric information between SMEs and banks can result in moral hazard in SMEs credit market in China. In order to reduce the moral hazard this paper designs and analyzes incentive contract which can satisfy the participation constraint and incentive compatibility constraint of SMEs. The analysis result shows, by designing the interest rate and collateral value, banks can guide SMEs to invest...
Effectively managing IT service centers such as call centers, computerized diagnostic imaging facilities, data centers, e-commerce sites, SaaS, and telecommunication networks has always been a challenging task, especially, when the managers running the centers possess private information about market condition and their marketing efforts. Prior studies often model IT service centers as queueing systems...
In the risk investment system, whether the double principal-agent relationship which is formed by different interest subjects can smoothly operate is the key to determine the success of risk investment, yet the issue of information asymmetry in the field is more serious than other industry, so that double principal-agent relationship formed in it exists huge risks. A series of binding agreements and...
This paper builds a private equity syndicators selection evaluation model base on risk-weight investment return using grey assessment. We analysis the impact factors exist in private equity syndicators' choice process. We come down these impact factors on reputation, organizational compatibility, resource complementarities and cost base the previous study. The 16 sub-indicators such as management...
Based on principal-agent theory, the separation of Legal Ownership and control for Value-driven factors in venture capitalists -backed enterprises is so seriously that the venture capitalist faces the moral hazard, adversity selection of the entrepreneurs, and the monitoring cost is high for him. Thus it's necessary to design incentive patterns for entrepreneurs to improve their performance. This...
Classic financial theory suggests that the external environment is effective, and there is no agent problem in corporate finance decision-making. However, actual market always deviates from the efficient market, corporate finance decision-making need to take into account manager's moral hazard. In this paper, we analyze the effect of capital structure on over-investment and on-the-job consumption...
The thesis analyses the source of bank franchise value, the relationship between franchise value and bank risk-taking behavior and capital-level.Introduces a model to illustrate how the regulator can deter bank risk-taking behavior by using bank closure policy from the point view of the franchise value. Finally, analyses the Chinese bank franchise value and gives some suggestions.
Credit risk is the main risk faced by the banking industry, so a lot of work has been done to reduce the losses caused by credit risk. The existing of information asymmetry is the root cause of commercial bank credit risk and is certainly a major cause. Credit risk means the possibility to make banks suffer a lot of losses because of the uncertainties in credit activities. The paper firstly analyzed...
This paper analyzed the asymmetric information between private equity firm and entrepreneurs. uses the approaches and models of game theory to analyze principal-agent problem between private equity firm and entrepreneurs. Find the higher risk aversion attitude will lead to lower incentive intensity to entrepreneurs under the fixed distribution proportion. The return of private equity firm is the decreasing...
Debt and equity financing are two main modes of corporation external financing. Over the recent years, corporations in China favor equity financing. Based on a comparison between the two financing modes, this paper analyses the advantages of debt financing. There are at least five advantages debt financing, such as financing costs, avoiding equity dilution, financial leverage, constraints to the management...
Asymmetric or incomplete information is a common and much discussed feature of market interactions, often constituting the difference between 'off the shelf' policy prescriptions and the realities of the development process. Besides outlining the resulting imperfections in the markets for physical and human capital, this paper attempts to provide an introduction to the applicability of fuzzy set theory...
In this paper the ability of effort and risk choice of fund manager are considered simultaneously and both are related together by model settings. Under the case of observable effort and unobservable effort respectively, the influence of benchmark on the parameters selection of incentive contract is studied. The research discovers that under the case of observable effort of manager the benchmark has...
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