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Financial Contracting: A Survey of Empirical Research and Future Directions

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Author Info

  • Michael R. Roberts
  • Amir Sufi

    ()
    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
    Booth School of Business, The University of Chicago, Chicago, Illinois 60637)

Abstract

We review recent evidence and future directions for empirical research on financial contracting in the context of corporate finance. Specifically, we survey evidence pertaining to incentive conflicts, control rights, collateral, renegotiation, and interactions between financial contracts and other governance mechanisms. We also discuss directions for future research, concluding that the financial contracting approach offers a potentially fruitful perspective for empirical researchers seeking to better understand a variety of issues in corporate finance including capital structure, investment policy, payout policy, and corporate governance.

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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-financial-071808-145241
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Bibliographic Info

Article provided by Annual Reviews in its journal Annual Review of Financial Economics.

Volume (Year): 1 (2009)
Issue (Month): 1 (November)
Pages: 207-226

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Handle: RePEc:anr:refeco:v:1:y:2009:p:207-226

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Related research

Keywords: security design; incentive conflicts; control rights; corporate finance; moral hazard; adverse selection; collateral; renegotiation; corporate governance;

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Cited by:
  1. Tan, Liang, 2013. "Creditor control rights, state of nature verification, and financial reporting conservatism," Journal of Accounting and Economics, Elsevier, vol. 55(1), pages 1-22.
  2. Costello, Anna M., 2013. "Mitigating incentive conflicts in inter-firm relationships: Evidence from long-term supply contracts," Journal of Accounting and Economics, Elsevier, vol. 56(1), pages 19-39.
  3. Bengtsson, Ola & Dai, Na & Henson, Clifford, 2014. "SEC enforcement in the PIPE market: Actions and consequences," Journal of Banking & Finance, Elsevier, vol. 42(C), pages 213-231.
  4. Xavier Giroud & Holger M. Mueller & Alex Stomper & Arne Westerkamp, 2010. "Snow and Leverage," NBER Working Papers 16497, National Bureau of Economic Research, Inc.
  5. Armstrong, Christopher S. & Guay, Wayne R. & Weber, Joseph P., 2010. "The role of information and financial reporting in corporate governance and debt contracting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 179-234, December.
  6. Zhang, Zhipeng, 2009. "Recovery Rates and Macroeconomic Conditions: The Role of Loan Covenants," MPRA Paper 17521, University Library of Munich, Germany.

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