BETRIEBSWIRTSCHAFTLICHES FORSCHUNGS-SEMINAR:

Am Fr., 24.4.1998 von 15.30-17.00 haelt im HS 8 des Betriebswirtschaftlichen Zentrums, Universitaet Wien, Bruennerstrasze 72, 1210 Wien,

Prof. Bruno Biais (Toulouse)

einen Vortrag ueber seine gemeinsame Arbeit mit Catherine Casamatta (Toulouse),

''Optimal leverage and aggregate investment''.

Eine Kopiervorlage des Papers liegt - soweit vorhanden - im Sekretariat von Prof. Zechner am Betriebswirtschaftszentrum auf.

------------ Abstract:

Relying on optimal contracts we analyze the financing of investment projects when entrepreneurs must exert unobservable effort and can switch to less profitable and riskier projects. When the effort problem is more severe than the risk shifting problem, optimal financing amounts to a combination of debt and equity. In the alternative case stock options must also be used. We then analyze the aggregate investment and equilibrium cost of capital arising when a continuum of such entrepreneurs, differing in terms of initial wealth, face a continuum of households. We examine the consequences of shocks on the magnitude of the risk-shifting and effort problems for aggregate investment, credit rationing, leverage and the cost of capital. =========================================================================