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Tepper School of Business 1-2007 Shareholders Unanimity with Incomplete Markets
| Content Provider | Semantic Scholar |
|---|---|
| Author | Cárceles-Poveda, Eva Coen-Pirani, Daniele |
| Copyright Year | 2015 |
| Abstract | When markets are incomplete, shareholders typically disagree on the …rm's optimal investment plan. This paper studies the shareholders'preferences with respect to the …rm's investment in a model with aggregate risk, incomplete markets and heterogeneous households who trade in …rms'shares instead of directly accumulating physical capital. If the production function exhibits constant returns to scale and borrowing limits are not binding, a …rm's shareholders unanimously agree on its optimal level of investment. In contrast, with binding borrowing constraints, constrained shareholders prefer a higher level of investment than unconstrained ones. also to an anonymous referee for comments that led to a substantial improvement in the exposition of the paper. The usual disclaimer applies. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://repository.cmu.edu/cgi/viewcontent.cgi?article=1054&context=tepper |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
