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Jensen and Meckling at 50

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  • Bolton, Patrick

Abstract

This article does three things: (1) it offers a slightly modernized treatment of the two well-known agency costs of external financing of Jensen and Meckling; (2) it provides a deeper exploration than they offer of the limited liability corporation, and of optimal control allocations when financial contracts are incomplete; and, (3) it assesses the lasting influence or their ideas, their multiple interpretations, as well as misinterpretations.

Suggested Citation

  • Bolton, Patrick, 2025. "Jensen and Meckling at 50," Journal of Financial Economics, Elsevier, vol. 172(C).
    • Handle: RePEc:eee:jfinec:v:172:y:2025:i:c:s0304405x25001242
    DOI: 10.1016/j.jfineco.2025.104116
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    References listed on IDEAS

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    Cited by:

    1. Stulz, René M., 2025. "The lessons of Michael C. Jensen," Journal of Financial Economics, Elsevier, vol. 172(C).

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