1 option
Internal versus External Capital Markets / Robert H. Gertner, David S. Scharfstein, Jeremy C. Stein.
- Format:
- Book
- Author/Creator:
- Gertner, Robert H.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w4776.
- NBER working paper series no. w4776
- Language:
- English
- Subjects (All):
- Capital market.
- Corporations--Finance--Mathematical models.
- Corporations.
- Finance--Decision making.
- Finance.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1994.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1994.
- Summary:
- This paper presents a framework for analyzing the costs and benefits of internal vs. external capital allocation. We focus primarily on comparing an internal capital market to bank lending. While both represent centralized forms of financing, in the former case the financing is owner-provided, while in the latter case it is not. We argue that the ownership aspect of internal capital allocation has three important consequences: 1) it leads to more monitoring than bank lending; 2) it reduces managers' entrepreneurial incentives; and 3) it makes it easier to efficiently redeploy the assets of projects that are performing poorly under existing management.
- Notes:
- Print version record
- June 1994.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.