This paper surveys the major issues regarding the transferability of tax losses upon a change of control. Whether tax losses should be transferable or not depends on whether the market for corporate control is efficient or not. If there are too few efficiency-enhancing takeovers, then takeovers...

This paper examines how the possibility of recontracting affects the financing of projects when an entrepreneur is privately informed about the distribution of returns. An entrepreneur solicits initial financing for a project from competing uninformed financiers. Once the project is undertaken,...

This paper addresses the question of whether R&D should be carried out by an independent research unit or be produced in-house by the firm marketing the innovation. We define two contractual structures. In an independent structure, the firm that markets the innovation buys it from an independent...

In this paper, we analyze the problem of providing incentives when there are more than one project. A principal has access to two (possibly correlated) projects which are managed by a single agent. Before undertaking a project, the agent-manager can spend some resources to investigate its...

This article studies the potential links between the value of collateral and the investment decisions made by firms. We show that the use of collateral is an endogenous response to the presence of asymmetric information in financial markets. We then show that permanent shocks to the value of...

This article characterizes equilibrium financial contracts in a two-period model with adverse selection. We consider the case in which private information of the entrepreneur about the profitability of his project is perfectly corraleted across periods. We show that, in a dynamic context,...

This paper studies the impact of financial market structure on investment decisions by firms using company panel data from six countries: Germany and Japan, where borrower-lender relationships are more of a long-term nature, Canada, France, United Kingdom, and United States, where financial...