A Theory of Liquidity and Risk Management
Event details
| Date | 25.09.2015 |
| Hour | 10:30 › 12:00 |
| Speaker | Neng WANG (Columbia University, Graduate School of Business) |
| Location | |
| Category | Conferences - Seminars |
We formulate a dynamic financial contracting problem with risky inalienable human capital. We show that the inalienability of the entrepreneur's risky human capital not only gives rise to endogenous liquidity limits but also calls for dynamic liquidity and risk management policies via standard securities that firms routinely pursue in
practice, such as retained earnings, possible line of credit draw-downs, and hedging via futures and insurance contracts.
practice, such as retained earnings, possible line of credit draw-downs, and hedging via futures and insurance contracts.
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