Product Market Efficiency: The Bright Side of Myopic, Uninformed, and Passive External Finance

We model the effect of external financing on a firm's ability to maintain a reputation for high-quality production. Producing high quality is first best. Defecting to low quality is tempting because it lowers current costs while revenue remains unchanged because consumers and outside investors...

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Veröffentlicht in:	Management science 2012-11, Vol.58 (11), p.2019-2036
Hauptverfasser:	Noe, Thomas H., Rebello, Michael J., Rietz, Thomas A.
Format:	Artikel
Sprache:	eng
Schlagworte:	adverse selection Applied sciences Capital costs Capital markets Capital structure Cash flow Cash flow forecasting Costs Entrepreneurs Equity Equity financing Exact sciences and technology Experiments Finance Financing Financing methods Firm modelling Incentives Investments Investors Laboratories Laboratory Operational research and scientific management Operational research. Management science Opportunistic behavior Parameterization Portfolio theory Prices Product markets Product quality Production Production standards Profitability Profits reputation Reputations Small and medium sized enterprises Studies U.S.A
Online-Zugang:	Volltext
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