Corporate finance and the theory of the firm (Paperback)

Scholarly Research Paper from the year 2003 in the subject Business economics - Investment and Finance, grade: 2,0 (B), European Business School - International University Schloss Reichartshausen Oestrich-Winkel (Corporate Finance and Capital Markets), language: English, comment: This seminar paper examines the links between corporate finance and the theory of the firm. After providing theoretical foundations in corporate finance and the theory of the firm are provided, the interrelation between corporate finance and the theory of the firm is evaluated by using a 3x3 matrix. This matrix compares three important theoretical frameworks of the firm with three major fields of corporate finance., abstract: This book examines the links between corporate finance and the theory of the firm. As a basis for this analysis, theoretical foundations in corporate finance and the theory of the firm are provided. Furthermore, current research on the theory of the firm and corporate finance for the recently emerged type of firm of the human-capital intensive firm is presented. The most significant part of the analysis is the evaluation of the interrelation between corporate finance and the theory of the firm using a 3x3 matrix. This matrix compares three important theoretical frameworks of the firm (the firm as a nexus of contracts, as a collection of growth options and as a collection of assets) with three major fields of corporate finance (capital structure, corporate governance and valuation). This assessment is done for the traditional asset-intensive industrial firm, one of two basic types of firms in today's economy. For giving an additional insight into current research, the recently emerged human-capital intensive firm is shortly described in comparison to the traditional asset-intensive firm, and implications for corporate finance for this new type of firm are explained. As a conclusion, three major results can be stated: firstly, the theory of the firm definitely in