Access to financing, rents, and organization of the firm
Renucci, Antoine (2008), Access to financing, rents, and organization of the firm, Journal of corporate finance, 14, 4, p. 337-346. http://dx.doi.org/10.1016/j.jcorpfin.2008.03.001
Type
Article accepté pour publication ou publiéExternal document link
http://halshs.archives-ouvertes.fr/halshs-00365983/en/Date
2008Journal name
Journal of corporate financeVolume
14Number
4Publisher
Elsevier
Pages
337-346
Publication identifier
Metadata
Show full item recordAbstract (EN)
This paper provides a theory for the choice of an organizational structure by the headquarters of a unitary structure concerned about overload. The headquarters can avoid overload by delegating operational decisions to divisions, i.e., moving the firm to a multidivisional structure. We show that under moral hazard these divisions receive rents for incentive purposes, and that the multidivisional structure is able to invest more. Thus, there is a trade-off between increasing investment and paying rents. We also show that this trade-off applies to situations where firms consider engaging in acquisitions and joint ventures, or where entrepreneurs consider resorting to venture capitalists.Subjects / Keywords
Gouvernance d'entreprise; Rationnement du crédit; Credit rationing; Agency rents; Unitary-form; Forme fonctionnelle; Forme multidivisionnelle; Multi-divisional formRelated items
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