Investment Reversibility and Agency Cost of Debt
研究债务融资如何影响股东的投资决策，发现投资可逆性越高，债务导致的效率损失越小；当投资完全可逆时，效率损失为零。
Previous research has argued that debt financing affects equity-holders' investment decisions, producing substantial inefficiency. This paper shows that the size of this inefficiency depends on the degree of investment reversibility. In a dynamic model of financing and investment, the paper provides an upper bound for the inefficiency produced by debt financing. The upper bound is decreasing in the degree of investment reversibility and is zero when investment is perfectly reversible. Copyright The Econometric Society 2008.