Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/101573 
Authors: 
Year of Publication: 
1991
Series/Report no.: 
Diskussionsbeiträge - Serie II No. 166
Publisher: 
Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft, Konstanz
Abstract: 
This paper focuses on the costs of limited liability in the theory of the firm. Insurance may discourage the opportunistic externalization of those costs in a way that enhances optimal risk allocation for corporate stakeholders. The paper hypothesizes that insurance will enable the firm to exploit more fully the quasi-rents associated with the profitable use of its organizational capital. At a critical level of insurability, internal coordination of the insurance function by common or joint ownership might enhance the credibility of the firm's organizational capital better than market insurance would do.
Document Type: 
Working Paper

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