In search of a unicorn: Dynamic agency with endogenous investment opportunities

IF 5.4 1区管理学 Q1 BUSINESS, FINANCE

Journal of Accounting & Economics Pub Date : 2024-11-01 DOI:10.1016/j.jacceco.2024.101738

Felix Zhiyu Feng , Robin Yifan Luo , Beatrice Michaeli

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引用次数: 0

Abstract

We study the optimal dynamic contract that provides incentives for an agent (e.g., SPAC sponsor, VC general partner, CTO) to exploit investment opportunities/targets that arrive randomly over time via a costly search process. The agent is privy to the arrival as well as to the quality of the target and can take advantage of this for rent extraction during the search process and the ensuing production. The optimal contract provides the agent with incentives for timely and truthful reporting via a time-varying threshold for investment and an internal charge for the time spent on search. In the equilibrium, as time elapses, the charge becomes progressively higher while the investment threshold is progressively lower, resulting in overinvestment at a time-varying degree. Our model generates empirically testable predictions regarding investments (such as M&As, hedge fund activism, VC investing, SPACs, and internal innovations), linking the degree of overinvestment to observable firm and industry characteristics.

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寻找独角兽具有内生投资机会的动态代理

我们研究的最优动态合约能激励代理人（如 SPAC 发起人、风险投资公司普通合伙人、首席技术官）利用投资机会/目标，这些投资机会/目标是通过高成本的搜索过程随机出现的。代理对投资机会的到来以及投资目标的质量了如指掌，并能在搜索过程中以及随后的生产过程中利用这一点攫取租金。最优合约通过随时间变化的投资阈值和搜索时间的内部收费，激励代理人及时、真实地报告。在均衡状态下，随着时间的推移，费用会逐渐增加，而投资门槛会逐渐降低，从而导致随时间变化的过度投资。我们的模型对投资（如并购、对冲基金激进主义、风险投资、SPACs 和内部创新）做出了可实证检验的预测，并将过度投资的程度与可观察到的公司和行业特征联系起来。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Accounting & Economics Multiple-

CiteScore

8.70

自引率

6.80%

发文量

期刊介绍： The Journal of Accounting and Economics encourages the application of economic theory to the explanation of accounting phenomena. It provides a forum for the publication of the highest quality manuscripts which employ economic analyses of accounting problems. A wide range of methodologies and topics are encouraged and covered: * The role of accounting within the firm; * The information content and role of accounting numbers in capital markets; * The role of accounting in financial contracts and in monitoring agency relationships; * The determination of accounting standards; * Government regulation of corporate disclosure and/or the Accounting profession; * The theory of the accounting firm.