國立虎尾科技大學 |

Essays on contracts and contract renegotiations : = Applications to land and financial markets.

Record Type:	Language materials, manuscript : Monograph/item
Title/Author:	Essays on contracts and contract renegotiations :/
Reminder of title:	Applications to land and financial markets.
Author:	Wang, Baogui.
Description:	1 online resource (119 pages)
Notes:	Source: Dissertations Abstracts International, Volume: 76-02, Section: A.
Contained By:	Dissertations Abstracts International76-02A.
Subject:	Finance. -
Online resource:	click for full text (PQDT)
ISBN:	9780612118805

Essays on contracts and contract renegotiations : = Applications to land and financial markets.
Wang, Baogui.

Essays on contracts and contract renegotiations :Applications to land and financial markets. - 1 online resource (119 pages)

Source: Dissertations Abstracts International, Volume: 76-02, Section: A.

Thesis (Ph.D.)--University of Toronto (Canada), 1996.

Includes bibliographical references

Most economic activities are governed by contracts and most contracts are incomplete. This study focuses on how contract incompleteness and renegotiation affect contract forms in agency relationship. The first chapter examines agrarian land contracts. An explanation is presented for sharecropping when contract renegotiation and tenant initiated separation are possible. Previous explanations simply assume that land contracts cannot be renegotiated and that separations are ruled out, and so rely on risk aversion or asymmetry of information. I argue that sharecropping plays a key role in the reduction of the probability of contract renegotiation. With contract renegotiation, the well known disincentive effects of sharecropping also arise with fixed-rent contracts. The contract choice depends on the tenant's alternative opportunity. As this alternative opportunity improves, the best contract for the landlord changes from a pure sharecropping contract to a fixed-rent contract. The second chapter is a study of venture capital investment and an explanation is presented for the use of convertible preferred equity in the venture capital industry, the mostly observed contract form. The contracts in the venture capital investment are long term and incomplete. As information is resolved over time, contracting parties' interest may diverge. In this setting I show that convertible preferred equities balance the contracting parties' continuation decision and the entrepreneur's incentive to work. By contrast, a debt contract induces the entrepreneur to abandon too many projects, an equity contract excessively reduces entrepreneur's incentive. The third chapter is a study of capital structure. I argue that firms do not have well defined capital structure targets. Every firm has a tendency to borrow as much as possible, all the way to its debt capacity. The debt capacity of a firm depends on how much the debt holder can claim in a contract renegotiation. Firms with more tangible assets have higher debt capacities. The empirical results based on industrial data confirms our theoretic prediction: the more the firm has tangible assets, the more the firm will be debt financed. Bankruptcy cost is significant in theory but not significant in practice. Potential bankruptcy costs are avoided through contract renegotiation.

Electronic reproduction.
Ann Arbor, Mich. :
ProQuest,
2024

Mode of access: World Wide Web

ISBN: 9780612118805Subjects--Topical Terms:

559073
Finance.
Subjects--Index Terms:

financial marketIndex Terms--Genre/Form:

554714
Electronic books.

Essays on contracts and contract renegotiations : = Applications to land and financial markets.
LDR:03643ntm a22003497 4500 001 1148966
005 20240930105306.5
006 m o d
007 cr bn ---uuuuu
008 250605s1996 xx obm 000 0 eng d
020 $a 9780612118805
035 $a (MiAaPQ)AAINN11880
035 $a AAINN11880
040 $a MiAaPQ $b eng $c MiAaPQ $d NTU
100 1 $a Wang, Baogui. $3 1475065
245 1 0 $a Essays on contracts and contract renegotiations : $b Applications to land and financial markets.
264 0 $c 1996
300 $a 1 online resource (119 pages)
336 $a text $b txt $2 rdacontent
337 $a computer $b c $2 rdamedia
338 $a online resource $b cr $2 rdacarrier
500 $a Source: Dissertations Abstracts International, Volume: 76-02, Section: A.
500 $a Publisher info.: Dissertation/Thesis.
500 $a Advisor: Husios, Arthur.
502 $a Thesis (Ph.D.)--University of Toronto (Canada), 1996.
504 $a Includes bibliographical references
520 $a Most economic activities are governed by contracts and most contracts are incomplete. This study focuses on how contract incompleteness and renegotiation affect contract forms in agency relationship. The first chapter examines agrarian land contracts. An explanation is presented for sharecropping when contract renegotiation and tenant initiated separation are possible. Previous explanations simply assume that land contracts cannot be renegotiated and that separations are ruled out, and so rely on risk aversion or asymmetry of information. I argue that sharecropping plays a key role in the reduction of the probability of contract renegotiation. With contract renegotiation, the well known disincentive effects of sharecropping also arise with fixed-rent contracts. The contract choice depends on the tenant's alternative opportunity. As this alternative opportunity improves, the best contract for the landlord changes from a pure sharecropping contract to a fixed-rent contract. The second chapter is a study of venture capital investment and an explanation is presented for the use of convertible preferred equity in the venture capital industry, the mostly observed contract form. The contracts in the venture capital investment are long term and incomplete. As information is resolved over time, contracting parties' interest may diverge. In this setting I show that convertible preferred equities balance the contracting parties' continuation decision and the entrepreneur's incentive to work. By contrast, a debt contract induces the entrepreneur to abandon too many projects, an equity contract excessively reduces entrepreneur's incentive. The third chapter is a study of capital structure. I argue that firms do not have well defined capital structure targets. Every firm has a tendency to borrow as much as possible, all the way to its debt capacity. The debt capacity of a firm depends on how much the debt holder can claim in a contract renegotiation. Firms with more tangible assets have higher debt capacities. The empirical results based on industrial data confirms our theoretic prediction: the more the firm has tangible assets, the more the firm will be debt financed. Bankruptcy cost is significant in theory but not significant in practice. Potential bankruptcy costs are avoided through contract renegotiation.
533 $a Electronic reproduction. $b Ann Arbor, Mich. : $c ProQuest, $d 2024
538 $a Mode of access: World Wide Web
650 4 $a Finance. $3 559073
653 $a financial market
653 $a land market
655 7 $a Electronic books. $2 local $3 554714
690 $a 0508
710 2 $a ProQuest Information and Learning Co. $3 1178819
710 2 $a University of Toronto (Canada). $3 1182602
773 0 $t Dissertations Abstracts International $g 76-02A.
856 4 0 $u http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=NN11880 $z click for full text (PQDT)