Optimal financial contracting and the effects of firm's size
研究了面临道德风险的企业最优动态政策，引入部分不可逆的耐用资本使企业规模成为状态变量，发现资本水平越高，清算概率越低且未来规模越大；模拟显示，在规模一定时，企业增长率、波动性和清算概率波动性随年龄下降。
Abstract We consider the design of the optimal dynamic policy for a firm subject to moral hazard problems. With respect to the existing literature we enrich the model by introducing durable capital with partial irreversibility, which makes the size of the firm a state variable. This allows us to analyze the role of firm's size, separately from age and financial structure. We show that a higher level of capital decreases the probability of liquidation and increases the future size of the firm. Although analytical results are not available, we show through simulations that, conditional on size, the rate of growth of the firm, its variability, and the variability of the probability of liquidation decline with age.