1.1. Motivation of the PaperIn this

1.1. Motivation of the Paper
In this paper we draw on recent progress in the theory of (1) property rights, (2) agency,
and (3) finance to develop a theory of ownership structure1 for the firm. In addition to tying
together elements of the theory of each of these three areas, our analysis casts new light on and
has implications for a variety of issues in the professional and popular literature including the
definition of the firm, the “separation of ownership and control,” the “social responsibility” of
business, the definition of a “corporate objective function,” the determination of an optimal capital
structure, the specification of the content of credit agreements, the theory of organizations, and the
supply side of the completeness of markets problems.
Our theory helps explain:
1. why an entrepreneur or manager in a firm which has a mixed financial structure
(containing both debt and outside equity claims) will choose a set of activities for the
firm such that the total value of the firm is less than it would be if he were the sole
owner and why this result is independent of whether the firm operates in monopolistic
or competitive product or factor markets;
2. why his failure to maximize the value of the firm is perfectly consistent with
efficiency;
3. why the sale of common stock is a viable source of capital even though managers do
not literally maximize the value of the firm;
4. why debt was relied upon as a source of capital before debt financing offered any tax
advantage relative to equity;
5. why preferred stock would be issued;
6. why accounting reports would be provided voluntarily to creditors and stockholders,
and why independent auditors would be engaged by management to testify to the
accuracy and correctness of such reports;
7. why lenders often place restrictions on the activities of firms to whom they lend, and
why firms would themselves be led to suggest the imposition of such restrictions;
8. why some industries are characterized by owner-operated firms whose sole outside
source of capital is borrowing;
9. why highly regulated industries such as public utilities or banks will have higher debt
equity ratios for equivalent levels of risk than the average nonregulated firm;
10. why security analysis can be socially productive even if it does not increase portfolio
returns to investors.
1.2 Theory of the Firm: An Empty Box?
While the literature of economics is replete with references to the “theory of the firm,”
the material generally subsumed under that heading is not actually a theory of the firm but rather a
theory of markets in which firms are important actors. The firm is a “black box” operated so as
to meet the relevant marginal conditions with respect to inputs and outputs, thereby maximizing
profits, or more accurately, present value. Except for a few recent and tentative steps, however,
we have no theory which explains how the conflicting objectives of the individual participants are
brought into equilibrium so as to yield this result. The limitations of this black box view of the firm
have been cited by Adam Smith and Alfred Marshall, among others. More recently, popular and
professional debates over the “social responsibility” of corporations, the separation of ownership
and control, and the rash of reviews of the literature on the “theory of the firm” have evidenced
continuing concern with these issues.2
A number of major attempts have been made during recent years to construct a theory of
the firm by substituting other models for profit or value maximization, with each attempt motivated
by a conviction that the latter is inadequate to explain managerial behavior in large corporations.3
Some of these reformulation attempts have rejected the fundamental principle of maximizing

Hasil (Bahasa Indonesia) 1:

1.1. Motivation of the PaperIn this paper we draw on recent progress in the theory of (1) property rights, (2) agency,and (3) finance to develop a theory of ownership structure1 for the firm. In addition to tyingtogether elements of the theory of each of these three areas, our analysis casts new light on andhas implications for a variety of issues in the professional and popular literature including thedefinition of the firm, the “separation of ownership and control,” the “social responsibility” ofbusiness, the definition of a “corporate objective function,” the determination of an optimal capitalstructure, the specification of the content of credit agreements, the theory of organizations, and thesupply side of the completeness of markets problems.Our theory helps explain:1. why an entrepreneur or manager in a firm which has a mixed financial structure(containing both debt and outside equity claims) will choose a set of activities for thefirm such that the total value of the firm is less than it would be if he were the soleowner and why this result is independent of whether the firm operates in monopolisticor competitive product or factor markets;2. why his failure to maximize the value of the firm is perfectly consistent withefficiency;3. why the sale of common stock is a viable source of capital even though managers donot literally maximize the value of the firm;4. why debt was relied upon as a source of capital before debt financing offered any taxkeuntungan relatif terhadap ekuitas;5. Mengapa saham preferensi akan dikeluarkan;6. Mengapa laporan akuntansi akan diberikan secara sukarela kepada kreditor dan pemegang saham,dan mengapa auditor independen akan terikat oleh manajemen untuk bersaksi tentangakurasi dan kebenaran laporan tersebut;7. Mengapa lender sering menempatkan pembatasan pada kegiatan perusahaan kepada siapa mereka meminjamkan, danMengapa perusahaan akan diri dibimbing untuk menyarankan pengenaan pembatasan seperti itu;8. Mengapa beberapa industri yang dicirikan oleh pemilik yang dioperasikan perusahaan satu-satunya di luarsumber modal pinjaman;9. Mengapa industri yang sangat diregulasi seperti utilitas publik atau Bank akan memiliki utang lebih tinggiekuitas rasio untuk tingkat yang setara risiko daripada rata-rata perusahaan nonregulated;10. Mengapa analisis keamanan bisa sosial produktif bahkan jika itu tidak meningkatkan portofoliokembali ke investor.1.2 teori perusahaan: kotak kosong?Sementara literatur ekonomi penuh dengan referensi untuk "teori Perusahaan"bahan umumnya mana menggolongkan di bawah judul yang tidak benar-benar teori yang tegas tapi agakteori pasar di mana perusahaan adalah aktor yang penting. Perusahaan adalah "kotak hitam" dioperasikan sehinggauntuk memenuhi kondisi marjinal relevan berkaitan dengan input dan output, sehingga memaksimalkankeuntungan, atau lebih tepatnya, nilai sekarang. Kecuali untuk beberapa langkah baru dan tentatif, namun,Kami memiliki tidak ada teori yang menjelaskan bagaimana tujuan bertentangan dari setiap pesertabrought into equilibrium so as to yield this result. The limitations of this black box view of the firmhave been cited by Adam Smith and Alfred Marshall, among others. More recently, popular andprofessional debates over the “social responsibility” of corporations, the separation of ownershipand control, and the rash of reviews of the literature on the “theory of the firm” have evidencedcontinuing concern with these issues.2A number of major attempts have been made during recent years to construct a theory ofthe firm by substituting other models for profit or value maximization, with each attempt motivatedby a conviction that the latter is inadequate to explain managerial behavior in large corporations.3Some of these reformulation attempts have rejected the fundamental principle of maximizing