Optimal financing structure with moral hazard constraint:A review of dynamic financial contract

ZHENG Jun, LI Zhongfei, DING Jie

Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (8) : 2159-2175.

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Systems Engineering - Theory & Practice ›› 2020, Vol. 40 ›› Issue (8) : 2159-2175. DOI: 10.12011/1000-6788-2019-2720-17

Optimal financing structure with moral hazard constraint:A review of dynamic financial contract

  • ZHENG Jun1, LI Zhongfei2, DING Jie1
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Abstract

Debt default, enterprise capital chain rupture and bankruptcy, as well as financial crisis have prompted economists to reflect on the efficiency and risk of financial contract. Taking the development of contract theory and technology as a logical clue, and the optimal contract design and optimization of financing structure in the asymmetric information finance environment as key research object, combining the inherent relationship between financing structure, asset pricing and moral risk, this paper makes a systematically review of the research methods and results of dynamic financial contract theory, and refines the ideas of constructing the unified theoretical system of research on corporate finance and asset pricing. Based on the theoretical development path, the paper discusses the future development direction of the dynamic financial contract theory, and gives the application prospect of the theory according to the characteristics of China's economic structure.

Key words

financing structure / dynamic moral hazard / contract design / assets pricing

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ZHENG Jun , LI Zhongfei , DING Jie. Optimal financing structure with moral hazard constraint:A review of dynamic financial contract. Systems Engineering - Theory & Practice, 2020, 40(8): 2159-2175 https://doi.org/10.12011/1000-6788-2019-2720-17

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Funding

National Natural Science Foundation of China (71721001, 71991474); National Social Science Foundation of China (18BJY062); Guangdong Philosophy and Social Science Planning Foundation (GD15YYJ06)
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