Virtus InterPress

INFLATION RISK, WEALTH EXPROPRIATION AND GOVERNANCE IMPLICATIONS

Robert Moro Visconti

DOI: 10.22495/cocv10i4c3art4

Abstract

With its often unperceived impact, interest rates and inflation volatility strongly affect long term stability within the firm, surreptitiously reshaping equilibria among different stakeholders and so raising key corporate governance concerns. Whereas the impact of interest rates and inflation on capital budgeting issues had been extensively analyzed, little attention has been paid to corporate governance implications, concerning key issues such as “optimal” (indexed) contracting, effective corporate ownership (messed up by wealth expropriation and redistribution), asset substitution or information asymmetries (embedded in hidden impacts on interest/inflation sensitive assets and liabilities). The topic is so theoretically and practically captivating, filling a gap in the existing literature and addressing real value protection targets, unassumingly crucial even for corporate ownership and control issues.

Keywords: Asset & Liability Management, Duration, Cost of Capital, Fixed/floating Debt, Indexation, Transaction Costs

How to cite this paper: Moro Visconti, R. (2013). Inflation risk, wealth expropriation and governance implications. Corporate Ownership & Control, 10(4-3), 329-340. http://doi.org/10.22495/cocv10i4c3art4

Download This Article
Corporate Governance Experts Global Repository
Merio Honor Честь
Ryoushin Conscience Совесть
Kouki Nobility Доброе имя