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Cited by 835

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A Theory of Debt and Equity: Diversity of Securities and Manager-Shareholder Congruence

Dewatripont, M., Tirole, J.·1994·The Quarterly Journal of Economics
DOI 10.2307/2118355
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Abstract

This paper shows how the optimal financial structure of a firm complements incentive schemes to discipline managers, and how the securities' return streams determine the claim-holders' incentives to intervene in management. The theory rationalizes (1) the multipUcity of securities, (2) the observed correlation between return streams and control rights of securities, and (3) the partial congruence between managerial and equity-holder preferences over policy choices and monetary rewards as well as the low level of interference of equity in management. The theory also offers new prospects for a reappraisal of the earlier corporate finance literature.

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Metadata

Authors
Dewatripont, M., & Tirole, J.
Venue
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Published
1994-11-01
Volume
109
Issue
4
Pages
1027-1054
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
DOI
10.2307/2118355
OpenAlex
W1586800968
Cited by
835
References
0
FWCI
106.39
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: A Theory of Debt and Equity: Diversity of Securities and Manager-Shareholder Congruence. https://app.cochat.ai/papers/10.2307/2118355
The paper
Dewatripont, M., & Tirole, J. (1994). A Theory of Debt and Equity: Diversity of Securities and Manager-Shareholder Congruence. The Quarterly Journal of Economics. https://doi.org/10.2307/2118355

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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.