Contracts between managers and investors: A study of master limited partnership agreements

Conrad S. Ciccotello, Chris J. Muscarella

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We analyze a sample of 119 master limited partnership agreements to examine the linkages between the contractual design and performance of organizations. Consistent with either efficient self-selection or focus arguments, partnerships that contractually limit their scope of operations tend to have superior industry-adjusted operating performance. We also find that contracting can substitute for equity ownership as a control mechanism. Partnerships with agreements unfavorable to investors tend to have higher proportions of insider equity ownership, compared to those with agreements more protective of investors.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalJournal of Corporate Finance
Volume7
Issue number1
DOIs
StatePublished - Mar 2001

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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