Corporate governance and the financing of investment for structural change


Hellwig, Martin


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URL: http://ub-madoc.bib.uni-mannheim.de/2828
URN: urn:nbn:de:bsz:180-madoc-28281
Document Type: Working paper
Year of publication: 2000
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series: Sonderforschungsbereich 504 > Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung (Laufzeit 1997 - 2008)
Subject: 330 Economics
Subject headings (SWD): Corporate Governance , Bank , Investitionspolitik , Investition , Allokation , Strukturwandel
Abstract: The paper puts forward the proposition that large corporations should be treated as financial institutions in their own right, as they use available earning from some activities to finance others, including new developments. With this view, it is suggested that the role of the financial system may be seen as channelling funds from activities earning cash to activities needing cash (rather than channelling fund from households to firms). Starting from a critical assessment of the literature on agency costs of internal finance, the paper discusses the pros and cons of having new activities financed within given corporate shells, with significant management autonomy; this is compared to a system where earnings are distributed and - at least partly - reinvested through organized markets. The political economy of decision making within existing corporate shells is identified as a major source of bias in decisions.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Hellwig, Martin (2000) Corporate governance and the financing of investment for structural change. Open Access [Working paper]
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