Article Details

Financing intangible capital

Oleh   Qi Sun [-]
Kontributor / Dosen Pembimbing : Mindy Z. Xiaolan
Jenis Koleksi : Jurnal elektronik
Penerbit : FMIPA - Matematika
Fakultas : Fakultas Matematika dan Ilmu Pengetahuan Alam (FMIPA)
Subjek : Financial economics
Kata Kunci : Intangible investment, Limited commitment, Employee financing, Debt capacity
Sumber : Journal of Financial Economics xxx (xxxx) xxx
Staf Input/Edit : Dwi Ary Fuziastuti   Ena Sukmana
File : 1 file
Tanggal Input : 2019-02-08 14:43:44

Firms finance intangible investment through employee compensation contracts. In a dy- namic model in which intangible capital is embodied in a firm’s employees, we analyze the firm’s optimal decisions on intangible capital investment, employee compensation con- tracts, and financial leverage. Employee financing is achieved by delaying wage payments in the form of future claims. We show that intangible capital investment is highly corre- lated with employee financing but not with debt issuance or regular equity refinancing. In our quantitative analysis, we show that this new channel of employee financing explains the cross-industry differences in leverage and financing patterns.