The DOI matches its Crossref record; 45 of the 45 references it cites were found in a registry or an index.
Dynamic Agency and the q Theory of Investment
Abstract
We develop an analytically tractable model integrating dynamic investment theory with dynamic optimal incentive contracting, thereby endogenizing financing constraints. Incentive contracting generates a history‐dependent wedge between marginal and average q, and both vary over time as good (bad) performance relaxes (tightens) financing constraints. Financial slack, not cash flow, is the appropriate proxy for financing constraints. Investment decreases with idiosyncratic risk, and is positively correlated with past profits, past investment, and managerial compensation even with time‐invariant investment opportunities. Optimal contracting involves deferred compensation, possible termination, and compensation that depends on exogenous observable persistent profitability shocks, effectively paying managers for luck.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
Financial intermediation and delegated monitoring
Diamond, D. W. (1984) · The Review of Economic Studies · doi:10.2307/2297430 · Cited by 8,476 · cited 4×
“0 e rs KsdAs Isds I(2) s 2Ks dUs + e P (Kt;Wt) ; where the agents continuation payo¤Wt evolves according to (13).”
BackgroundMethodInfluentialDo Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints?
Kaplan, S. N., & Zingales, L. (1997) · The Quarterly Journal of Economics · doi:10.1162/003355397555163 · Cited by 6,770
Financing Constraints and Corporate Investment
Fazzari, S. M., Hubbard, R. G., Petersen, B. C., Blinder, A. S., & Poterba, J. M. (1988) · Brookings Papers on Economic Activity · doi:10.2307/2534426 · Cited by 5,574
Agency Costs, Net Worth, And Business Fluctuations
Bernanke, B., Gertler, M., Bernanke, B., & Gertler, M. (1988) · Unknown · doi:10.22004/ag.econ.292693 · Cited by 4,386
Financing Constraints and Corporate Investment
Fazzari, S., Hubbard, R. G., & Petersen, B. (1987) · National Bureau of Economic Research · doi:10.3386/w2387 · Cited by 4,351
Tobin's Marginal q and Average q: A Neoclassical Interpretation
Hayashi, F. (1982) · Econometrica · doi:10.2307/1912538 · Cited by 2,735
Capital-Market Imperfections and Investment
Hubbard, R. G. (1997) · National Bureau of Economic Research · doi:10.3386/w5996 · Cited by 2,545
Are CEOs Rewarded for Luck? The Ones Without Principals Are
Bertrand, M., & Mullainathan, S. (2001) · The Quarterly Journal of Economics · doi:10.1162/00335530152466269 · Cited by 1,740
Recursive Macroeconomic Theory
Ljungqvist, L., & Sargent, T. J. (2000) · Cited by 1,605
Agency, Information and Corporate Investment
Stein, J. C. (2003) · Handbook of the Economics of Finance · doi:10.1016/s1574-0102(03)01006-9 · Cited by 1,347
Cited by
Agency Conflicts and Cash: Estimates from a Dynamic Model
NIKOLOV, B., & WHITED, T. M. (2014) · The Journal of Finance · doi:10.1111/jofi.12183 · Cited by 363
Corporate Governance and Costs of Equity: Theory and Evidence
Li, D., & Li, E. X. N. (2018) · Management Science · doi:10.1287/mnsc.2016.2570 · Cited by 22
Metadata
- Authors
- DEMARZO, P. M., FISHMAN, M. J., HE, Z., & WANG, N.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2012-11-19
- Volume
- 67
- Issue
- 6
- Pages
- 2295-2340
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3123932338
- Cited by
- 325
- References
- 45
- FWCI
- 86.17
- Type
- journal article
- Language
- en
- Open access
- closed
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: Dynamic Agency and the q Theory of Investment. https://app.cochat.ai/papers/10.1111/j.1540-6261.2012.01787.x
- The paper
- DEMARZO, P. M., FISHMAN, M. J., HE, Z., & WANG, N. (2012). Dynamic Agency and the q Theory of Investment. The Journal of Finance. https://doi.org/10.1111/j.1540-6261.2012.01787.x
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
