纸用英语怎么说Theory of the Firm: Managerial Behavior,Agency Costs and Ownership Structure
婴儿脐带多久脱落正常Michael C. Jenn Harvard Business School and William H. Meckling*University of Rochester
1. Introduction
1.1.Motivation of the Paper
生命的火花In this paper we draw on recent progress in the theory of (1) property rights, (2) agency,and (3) finance to develop a theory of ownership structure for the firm. In addition to tying together elements of the theory of each of the three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature including the definition of the firm, the “paration of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness of markets problems.佐贺的超级阿嬷读后感
Our theory helps explain:
1. why an entrepreneur or manager in a firm which has a mixed financial structure(containing both debt and outside equity claims) will choo a t of activities for the firm such that the total value of the firm is less than it would be if he were the sole owner and why this result is independent of whether the firm operates in monopolistic or competitive product or factor markets;雨刷片
2. why his failure to maximize the value of the firm is perfectly consistent withefficiency;
3. why the sale of common stock is a viable source of capital even though managers do not literally maximize the value of the firm;
4. why debt was relied upon as a source of capital before debt financing offered any tax advantage relative to equity;
5. why preferred stock would be issued;
美网时间6. why accounting reports would be provided voluntarily to creditors and stockholders, and why independent auditors would be engaged by management to testify to the accuracy and correctness of such reports;
7. why lenders often place restrictions on the activities of firms to whom they lend, and why firms would themlves be led to suggest the imposition of such restrictions;
8. why some industries are characterized by owner-operated firms who sole outside source of capital is borrowing;
9. why highly regulated industries such as public utilities or banks will have higher debt equity ratios for equivalent levels of risk than the average nonregulated firm;
10. why curity analysis can be socially productive even if it does not increa portfolio returns to investors.
1.2 Theory of the Firm: An Empty Box?
While the literature of economics is replete with references to the “theory of the firm,” the material generally subsumed under that heading is not actually a theory of the firm but rather a theory of markets in which firms are important actors. The firm is a “black box” operated so as to meet the relevant marginal conditions with respect to inputs and outputs, thereby maximizing profits, or more accurately, prent value. Except for a few recent and tentative steps, however,we have no theory which explains how the conflicting objectives of the individual participants are brought into equilibrium so as to yield this result. The limitations of this black box view of the firm have been cited by Adam Smith and Alfred Marshall, among others. More recently, popular and professional debates over the “social responsibility” of corporations, the paration of ownership and control, and the rash of reviews of the literature on the “theory of the firm” have evidenced continuing concern with the issues.
A number of major attempts have been made during recent years to construct a theory of the firm by substituting other models for profit or value maximization, with each attempt motivated by a conviction that the latter is inadequate to explain managerial behavior in la
rge corporations. Some of the reformulation attempts have rejected the fundamental principle of maximizingbehavior as well as rejecting the more specific profit-maximizing model. We retain the notion of maximizing behavior on the part of all individuals in the analysis that follows.
1.3 Property Rights
An independent stream of rearch with important implications for the theory of the firm has been stimulated by the pioneering work of Coa, and extended by Alchian, Demtz, and others. A comprehensive survey of this literature is given by Furubotn and Pejovich (1972).While the focus of this rearch has been “property rights”,the subject matter encompasd is far broader than that term suggests. What is important for the problems addresd here is that specification of individual rights determines how costs and rewards will be allocated among the participants in any organization. Since the specification of rights is generally affected through contracting (implicit as well as explicit), individual behavior in organizations, including the behavior of managers, will dep
end upon the nature of the contracts. We focus in this paper on the behavioral implications of the property rights specified in the contracts between the owners and managers of the firm.
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1.4 Agency Costs
Many problems associated with the inadequacy of the current theory of the firm can also be viewed as special cas of the theory of agency relationships in which there is a growing literature. This literature has developed independently of the property rights literature even though the problems with which it is concerned are similar; the approaches are in fact highly complementary to each other.
We define an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some rvice on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximizers, there is good reason to believe that the agent will not always act in the best interests of the principal. The principal can limit divergences fr
om his interest by establishing appropriate incentives for the agent and by incurring monitoring costs designed to limit the aberrant activities of the agent. In addition in some situations it will pay the agent to expend resources (bonding costs) to guarantee that he will not take certain actions which would harm the principal or to ensure that the principal will be compensated if he does take such actions. However, it is generally impossible for the principal or the agent at zero cost to ensure that the agent will make optimal decisions from the principal’s viewpoint. In most agency relationships the principal and the agent will incur positive monitoring and bonding costs (non-pecuniary as well as pecuniary), and in addition there will be some divergence between the agent’s decisions and tho decisions which would maximize the welfare of the principal. The dollar equivalent of the reduction in welfare experienced by the principal as a result of this divergence is also a cost of the agency relationship, and we refer to this latter cost as the “residual loss.” We define agency costs as the sum of:
