scholarly journals Analysis of the Brazilian tax incentives to innovation and patent data: a Principal-Agent model approach

2021 ◽  
Vol 13 (2) ◽  
pp. 403-437
Author(s):  
Felippe Clemente ◽  
Evaldo Henrique Da Silva
Keyword(s):  
Moral Hazard ◽  
Innovation System ◽  
Tax Incentives ◽  
Industrial Sector ◽  
Patent Data ◽  
Agent Model ◽  
Extensive Game ◽  
Positive Effects ◽  
Principal Agent Model ◽  
Model Approach

We propose to evaluate Lei do Bem (law 11.196/05) for Brazilian regions (North, Northeast, Center-West, Southeast and South). This is the first study that analyzes Lei do Bem using extensive game simulations for the different regions of the country. Based on data from 2006 to 2015, we find moral hazard between government and innovative Brazilian companies, as there was no express incentive in the Lei do Bem to stimulate the industrial sector to innovate and register the innovation as a patent. Thus, policies that review the tax incentives structure contained in the Lei do Bem as well as encourage industries and companies to file patents in public patent databases may have positive effects on the Brazilian innovation system.

scholarly journals Analysis of the Brazilian tax incentives to innovation and patent data: a Principal-Agent model approach

2021 ◽  
Vol 13 (2) ◽  
pp. 137-170
Author(s):  
Felippe Clemente ◽  
Evaldo Henrique Da Silva
Keyword(s):  
Moral Hazard ◽  
Innovation System ◽  
Tax Incentives ◽  
Industrial Sector ◽  
Patent Data ◽  
Agent Model ◽  
Extensive Game ◽  
Positive Effects ◽  
Principal Agent Model ◽  
Model Approach

We propose to evaluate Lei do Bem (law 11.196/05) for Brazilian regions (North, Northeast, Center-West, Southeast and South). This is the first study that analyzes Lei do Bem using extensive game simulations for the different regions of the country. Based on data from 2006 to 2015, we find moral hazard between government and innovative Brazilian companies, as there was no express incentive in the Lei do Bem to stimulate the industrial sector to innovate and register the innovation as a patent. Thus, policies that review the tax incentives structure contained in the Lei do Bem as well as encourage industries and companies to file patents in public patent databases may have positive effects on the Brazilian innovation system.

Agency, Information, and the Structure of Moral Problems in Business

2006 ◽  
Vol 28 (2) ◽  
pp. 177-195 ◽  
Author(s):  
Bryan W. Husted
Keyword(s):  
Asymmetric Information ◽  
Moral Hazard ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Information Economics ◽  
Principal Agent ◽  
Ethical Problems ◽  
Agent Model ◽  
Moral Problems ◽  
Principal Agent Model

Many ethical problems in business can be characterized as having elements of incomplete and/or asymmetric information. This paper analyzes such problems using information economics and the principal-agent model. It defines the nature of moral problems in business and then applies principal-agent models involving adverse selection and moral hazard to these problems. Possible solutions to conditions of information asymmetry are examined in order to support the development of organizational virtue.

Double-sided moral hazard, information screening and the optimal contract

2016 ◽  
Vol 6 (4) ◽  
pp. 404-431 ◽  
Author(s):  
Jin Xue ◽  
Yiwen Fei
Keyword(s):  
Venture Capital ◽  
Moral Hazard ◽  
Capital Investment ◽  
Principal Agent ◽  
Optimal Contract ◽  
Fixed Income ◽  
Content Type ◽  
Agent Model ◽  
Venture Capital Investment ◽  
Principal Agent Model

Purpose In the practice of venture capital investment, the venture capital will not only claim the share of the enterprise’s future output, but also a certain amount of fixed income. The purpose of this paper is to examine the optimal contract which blends the variable ownership income and the fixed income theoretically so as to provide a keen insight into the venture capital practice. Design/methodology/approach This paper establishes an extended principal-agent model and researches on the design of optimal contract dominated by venture capital with double-sided moral hazard and information screening. Findings By establishing theoretical models, the main findings are: first, high-quality enterprise tends to relinquish less ownership but give more fixed return to the venture capital as compensation in order to obtain the venture capital financing; second, low-quality enterprise is willing to relinquish more ownership but give less fixed return to the venture capital for financing; third, due to the existence of double-sided moral hazard, neither of the venture capital and the enterprise will exert their best effort. Originality/value This paper furthers the application of principal-agent model in the field of venture capital investment and researches on the optimal contract, considering double-sided moral hazard and adverse selection at the same time originally.

scholarly journals Has Moral Hazard Become a More Important Factor in Managerial Compensation?

2009 ◽  
Vol 99 (5) ◽  
pp. 1740-1769 ◽  
Author(s):  
George-Levi Gayle ◽  
Robert A. Miller
Keyword(s):  
Moral Hazard ◽  
Firm Size ◽  
Small Firms ◽  
Conflicts Of Interest ◽  
Secular Trends ◽  
Managerial Compensation ◽  
Compensation Plans ◽  
Agent Model ◽  
Exogenous Growth ◽  
Principal Agent Model

We estimate a principal-agent model of moral hazard with longitudinal data on firms and managerial compensation over two disjoint periods spanning 60 years to investigate increased value and variability in managerial compensation. We find exogenous growth in firm size largely explains these secular trends in compensation. In our framework, exogenous firm size works through two channels. First, conflicts of interest between shareholders and managers are magnified in large firms, so optimal compensation plans are now more closely linked to insider wealth. Second, the market for managers has become more differentiated, increasing the premium paid to managers of large versus small firms. (JEL D82, L25, M12, M52)

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