Miglo, A. (2010) Capital structure and earnings manipulation. Journal of Economics and Business, 62 (5). pp. 367-382.
Full text not available from this repository.Abstract
We consider an optimal contract between an entrepreneur and an investor, where the entrepreneur is subject to a double-moral hazard problem (one being the choice of production effort and the other being earnings manipulation). Since the entrepreneur cannot entirely capture the results of his effort, investment is below the optimal level and production effort is socially inefficient. The opportunity to manipulate earnings protects the entrepreneur against the risk of a low payoff when production is unsuccessful. Ex ante, this provides an incentive for the entrepreneur to increase investment and improve effort.
Item Type: | Article |
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Uncontrolled Keywords: | earnings manipulation,intertemporal substitution,design of securities,property rights,double-moral hazard |
Faculty \ School: | Faculty of Social Sciences > School of Economics |
Related URLs: | |
Depositing User: | LivePure Connector |
Date Deposited: | 19 Oct 2021 01:16 |
Last Modified: | 21 Apr 2023 01:11 |
URI: | https://ueaeprints.uea.ac.uk/id/eprint/81771 |
DOI: | 10.1016/j.jeconbus.2010.05.001 |
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