The Q Theory of Investment with Private Benefits of Control, Soft Budget Constraints and Financial Constraints

Mykhayliv, Dariya; Zauner, K.G.

dc.contributor.author	Mykhayliv, Dariya	*
dc.contributor.author	Zauner, K.G.	*
dc.date.accessioned	2017-02-02T12:16:22Z
dc.date.available	2017-02-02T12:16:22Z
dc.date.issued	2015-12
dc.identifier.citation	Mykhayliv D and Zauner KG (2015) The Q Theory of Investment with Private Benefits of Control, Soft Budget Constraints and Financial Constraints. Working Paper. The Authors.	en_US
dc.identifier.uri	http://hdl.handle.net/10454/11240
dc.description	yes	en_US
dc.description.abstract	In this paper, we extend Tobin’s Q model under financial frictions (Hennesy, Levy, and Whited, Journal of Financial Economics (2007)), using a discrete-time version of their model, to include private benefits of control of managers and other stakeholders and soft budget constraints in the form of money injections into the firm. Managers are not viewed to maximise shareholder value, but to maximise the value of their shareholding plus their private benefits of control. Private benefits of control introduce elements of asset stripping into the model. We characterize the optimal investment policy, analyse comparative statics and discuss applications to firms in transitional economies.	en_US
dc.language.iso	en	en_US
dc.rights	© 2015 The Authors. Reproduced by permission from the copyright holder.	en_US
dc.subject	Corporate governance; Q therory of investment; Financial constraints; Investment; Private benefits of control; Soft budget constraints	en_US
dc.title	The Q Theory of Investment with Private Benefits of Control, Soft Budget Constraints and Financial Constraints	en_US
dc.status.refereed	n/a	en_US
dc.type	Working Paper	en_US
dc.type.version	Accepted Manuscript	en_US
refterms.dateFOA	2018-07-26T09:23:09Z