A Study on the Relationship between Manager's Private Benefits and Over-investment

Huai Zhen LIU;Ling Nan OU YANG

Systems Engineering - Theory & Practice ›› 2004, Vol. 24 ›› Issue (10) : 44-48.

PDF(173 KB)
PDF(173 KB)
Systems Engineering - Theory & Practice ›› 2004, Vol. 24 ›› Issue (10) : 44-48. DOI: 10.12011/1000-6788(2004)10-44
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A Study on the Relationship between Manager's Private Benefits and Over-investment

  • Huai Zhen LIU,Ling Nan OU YANG
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Abstract

It is difficult that investment level is optimal because of principal-agency. The paper discusses the relationship between manager's private benefits and investment behavior. By developing model, we find that manager's private benefits is the determinant of over-investment, and manager's payoff only affects the level of his efforts. Moreover, manager will be punished if share-holder find over-investment occurs. We believes that sound debts, perfect monitoring and the acknowledge of property right of human b...

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private benefits / over-investment

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Huai Zhen LIU , Ling Nan OU YANG. A Study on the Relationship between Manager's Private Benefits and Over-investment. Systems Engineering - Theory & Practice, 2004, 24(10): 44-48 https://doi.org/10.12011/1000-6788(2004)10-44
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