Limited liability in business groups

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Show simple item record Ropero Moriones, Eva 2006-11-07T11:23:35Z 2006-11-07T11:23:35Z 2005-12
dc.description.abstract We consider a model in which a holding company has to decide whether to finance an investment project in a subsidiary. The project can be financed either through internal capital or through debt. The subsidiary's manager has private information on the quality of the project and has empirebuilding preferences. When bankruptcy is costly for the subsidiary's manager, the choice between internal and external financing is part of an optimal mechanism that induces truthful revelation of the information. The first best solution can be approached if the cost of bankruptcy for the manager is high enough.
dc.format.extent 572079 bytes
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries Workings Paper. Bussiness Economics
dc.relation.ispartofseries 2005-17
dc.title Limited liability in business groups
dc.type workingPaper
dc.subject.eciencia Empresa
dc.rights.accessRights openAccess
dc.identifier.repec wb057617
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