Managerial incentives, capital structure and corporate governance.

摘要

This dissertation consists of three main chapters on managerial incentives and corporate governance. The second chapter of the dissertation proposes a theory of a firm's simultaneous decisions over debt financing and debtholders' involvement in corporate governance. In a framework where risky innovative projects are generated through managerial initiative and ratified by a board of directors representing investors, inefficiencies may arise when the ratification decision can not be contracted ex ante. The basic model of this chapter suggests that both the capital structure and the board structure then serve as a commitment device to encourage managerial initiative. The trade-off between the gains from managerial initiation of innovative projects and those from risk control determines the interacting relation between a firm's optimal debt level and debtholders' representation in its corporate governance. In an extension with tax shield of debt and liquidation cost, the chapter characterizes conditions under which a firm may or may not have debtholders' representation in its board of directors to maximize firm value.;The third chapter models career concerns of agents with multidimensional talents. The model shows that when multidimensional talents enable an agent to switch career paths in the future, her multidimensional career concerns also reduce the agent's incentives in her current tasks, leading to hampered performance of the agent. The model brings new angles to the study of SOE management. When SOE managers have career concerns in both business and politics, the model predicts that SOE managers have lower incentives in improving firm performance and there exists market segmentation where only low and high business talents may work for SOEs while all medium business talents find it optimal to work in the private sector.;The fourth chapter develops a moral hazard model where an agent can privately expropriate resources from her projects. It is shown that the pay-for-performance sensitivity or the proportion of the project assigned to the agent in the optimal contract may be positively or negatively correlated with the expected productivity of the project, depending on the functional characteristics of the agent's private benefit from expropriation. In a setting similar to that proposed by Kahn (1990), we show that higher equity premium may be achieved when countercyclical idiosyncratic risks are resulted from the moral hazard problem.