"Magnificent."-The Economist
From the Nobel Prize–winning economist, a groundbreaking and comprehensive account of corporate finance
Recent decades have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations-equity, debt, and valuation-today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of.
Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics.
Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions.
Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.
Jean Tirole, the winner of the 2014 Nobel Prize in Economics, is honorary chairman of the Foundation Jean-Jacques Laffont at the Toulouse School of Economics and of the Institute for Advanced Study in Toulouse, and annual visiting professor of economics at the Massachusetts Institute of Technology. His books include Economics for the Common Good and Financial Crises, Liquidity, and the International Monetary System (both Princeton). "Using a single elementary model Tirole brings out with refreshing ease an unsuspected unity and simplicity in a field that might otherwise be perceived as dishearteningly fragmented and complex. This masterful book will be a formidable teaching tool at the graduate level and an essential reference for research in corporate finance."-Marco Pagano, Professor of Economics, University of Naples Federico II
"The field of corporate finance has developed rapidly and extensively in the last twenty years, but those who want to teach it face a barrier: the absence of a widely accepted textbook. Jean Tirole's book fills that gap. Applying his celebrated analytical and expositional skills, Tirole synthesizes and unifies the field in a clear and accessible manner, emphasizing particularly the connections between corporate finance and contract theory and the role of incentives and control in firms' financial decisions. The result is a book that will be an important resource for students and teachers alike."-Oliver Hart, Andrew E. Furer Professor of Economics, Harvard University
"With this book, Tirole has provided a comprehensive treatment of modern corporate finance theory in one place with one integrated framework. As a bonus, he also describes many of the important empirical results in corporate finance and how they relate to the theories. The book will be a valuable asset to students (and professors) of corporate finance."-Steve Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, University of Chicago Graduate School of Business
"This is a remarkable book. Theoretical work in corporate fina
