One important issue in firms' governance is how to incentives so that activity centres can become more efficient. In this paper, we first introduce an agency contract where the salary of the manager of an activity centre that produces an intermediate product is dependent of its performance....

The aim of this paper is twofold. First, we present a new capital budgeting method, called the real rate of return (RRR), which has been developed for solving the inconsistency of the modified internal rate of return (MIRR) with shareholders' wealth maximization when costs of capital differ...

We develop a theoretical model of managerial myopia based on the Q theory of investment. In this model, the manager chooses both investment quantity and the investment horizon. The manager may be myopic, causing an excess weight to be placed by the manager on short term profits, relative to...

This paper investigates characteristics of Norwegian seasoned equity issuing companies. Literature about the timing issue has mainly been focusing on U.S. firm commitments, but we include rights issues and divide firm commitments into three subgroups, accelerated bookbuilt offerings, bought...

We study innovation and R&D investments made from 2008 to 2010 by UK companies that were the targets of leveraged buyout (LBO) in previous years. We find that overall, LBO companies do not exhibit lower innovation and R&D investments than non-LBO companies during the crisis, with other things...

We investigate the role of managerial overconfidence in shaping corporate debt financing policy. Using a sample of 229 small French companies listed during 2003–2012, we show that overconfident owner–managers opt for less levered financing structures than their non-owner peers. Additional...

This research explores whether management by family members creates or destroys firm value. We estimate the impact of family pervasiveness in top management (family members as executive officers or board members) on firm value as measured by Tobin's Q. Results indicate that family members acting...

Trade credit does not use collateral and the hard-to-enforce contracts depend on trust and reputation. Taiwan is a small open economy and suffers more information asymmetry problems than a country with more domestic trade. Exploring this situation, this paper collects data for Taiwanese traded...

At each time, a firm facing uncertainty over future market conditions have to make a decision whether they should continue to produce or stop the process? As the traditional principle, the firm will go out of production when the price of the typical unit does not cover the average variable cost...

Market risk measurement has a long tradition in finance and it has been drawing the attention of many academic studies since Markowitz (1952). But the CAPM model (and derived models) assumptions have been targets of much criticism, in the sense that beta estimation may be imprecise. The...