Risky debt, managerial ownership and capital structure: new fundamental doubts on the classical agency approach

Article Abstract:

Agency theory makes certain predictions about costs of debt and uses the notion of agency costs. There are problems with this theory and the concept of agency costs. Agency costs relating to debt may not relate to debt ratios of firms. This and other problems mean that optimism over agency-theoretical models is excessive, and their predictive power is limits. There is a new for further research on this topic rather than seeking to apply this model to new areas.

Agency theory, Bad debts

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Why capital hires labour in team production

Article Abstract:

One-shot non-co-operative games involves externalities where teams are involved and there are budget-balancing constraints. Residual claimants should subsidize teams for performances under the first best, in order for incentive schemes to be Pareto-improving. Stable rewards will accrue to labor along a range of output levels and capital is needed for ownership rights to the residual. Initial endowments of team members determine their alloted roles.

Business budgets

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A reply to Maniatis

Article Abstract:

Thanasis Maniatis' contention that it is possible to divide income from self-employment into a self generated portion and a portion that represents income from the exploitation of others is very commendable. By using this theory, economists and political analysts can accurately test the plausibility of many of Karl Marx's main arguments regarding a capitalist economic structure.

Criticism and interpretation, Marxist economics, Marx, Karl (German political philosopher)

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