Adverse Selection and Moral Hazard in Equity Partnerships: Evidence from Hollywood's Slate Financing Agreements
- We use a movie industry project-by-project data set to analyze the principal–agent problem in slate financing arrangements. Under this specific film financing regime, which has become a significant mode of raising capital in Hollywood over the past decade, an external investor concludes a long-term contract with a film producer and commits to cofinance a larger number of future film projects of that particular partner. In line with our theoretical conjectures, slate cofinanced movies receive poorer quality ratings and yield considerably lower return rates. Our data suggests that a substantial part of these performance differences may be attributed to adverse project selection and producer moral hazard.
| Author: | Christian Opitz, Kay Hendrik HofmannORCiD |
|---|---|
| Title (English): | Adverse Selection and Moral Hazard in Equity Partnerships: Evidence from Hollywood's Slate Financing Agreements |
| DOI: | https://doi.org/10.1111/jems.12069 |
| ISSN: | 1530-9134 |
| ISSN: | 1058-6407 |
| Parent Title (English): | Journal of economics & management strategy |
| Document Type: | Article |
| Language: | English |
| Year of Completion: | 2014 |
| Release Date: | 2024/09/13 |
| Volume: | 23 |
| Issue: | 4 |
| First Page: | 811 |
| Last Page: | 838 |
| Note: | Zugriff im Hochschulnetz |
| Faculties: | Fakultät WiSo |
| DDC classes: | 700 Künste und Unterhaltung / 791 Öffentliche Darbietungen, Film, Rundfunk |
| Review Status: | Peer Reviewed |