Corporate Rent-Seeking and the managerial soft-budget constraint

Rodolfo Apreda ()

No 283, CEMA Working Papers: Serie Documentos de Trabajo. from Universidad del CEMA

Abstract: This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage with corporate governance environments. It will attempt to accomplish this task by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance learning and practice. Secondly, the paper contributes to focus on cash-flows reliability and managers’ accountability. Thirdly, it is shown how conflicts of interest underlie rent-seeking behavior, and how the latter relates to the soft-budget constraint.

Keywords: Rent-Seeking; Soft-Budget Constraint; Corporate Governance; Incremental Cash Flow model; Conflicts of Interest. (search for similar items in EconPapers)
JEL-codes: G30 G34 D72 D74 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-fin, nep-mic and nep-pol
Date: 2004-12
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Persistent link: http://EconPapers.repec.org/RePEc:cem:doctra:283

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