The Use of Covenants: An Empirical Analysis of Venture Partnership Agreements
分析了1978至1992年间140份风险投资基金合伙协议中的契约条款，发现契约的使用既受代理问题严重程度影响，也反映了风险投资家的市场力量。
This paper examines covenants in 140 partnership agreements establishing venture capital funds that were executed between 1978 and 1992. Despite the similar objectives and structures of these funds and the relatively limited number of contracting parties, the agreements are quite heterogeneous in their inclusion of covenants. We examine two hypotheses that suggest when covenants will be included or omitted. First, covenant use may be determined by the extent of agency problems: because covenants are costly to negotiate and monitor, they will only be employed when these problems are severe. Alternatively, covenant use may reflect the venture capitalists' market power. Market power may shift if the demand for venture capital services changes while the supply of these services remains fixed in the short run. The evidence is consistent with both hypotheses. This is in contrast to previous results which have either focused exclusively on costly contracting or provided only weak support for market power.