• Internal Capital Allocation Incentive Model of Enterprise Groups   [MASS 2012]
  • Author(s)
  • Gao Yongru
  • Based on principal-agent theory, the essay will deal with the issue of incentive model between the CEO of Enterprise Group Headquarters and branch manager. In this essay, principal-agent incentive model is established with asymmetric information, and we also analyze the characteristics of the investment risk-sharing model between headquarters and divisions and incentive model so as to draw a few conclusions which are of reference value for practice.
  • enterprise groups; internal capital allocation; incentives; principal-agent
  • References
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    Faulkender, M., Petersen, M., 2006. Does the source of capital affect capital structure? Rev. Finan. Stud. 19, 45-79.
    Hund, J., Munk, D., Tice, S., 2010. Uncertainty about average profitability and the diversification discount. J. Finan. Econ. 96, 463-484.
    Matsusaka, J., Nanda, V., 2002. Internal capital markets and corporate refocusing. J. Finan. Intermed. 11, 176-211.

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