초록 열기/닫기 버튼
This paper analyzes how limited liability and capital size affect a firm's investment for product safety. Firms become bankrupt when their products cause accidents and they cannot compensate for the damages incurred. Relatively small firms obtain greater expected profit because they do not need to pay full damage when their products cause accidents and they become bankrupt. Thus, smaller firms may have greater incentives than lager firms to participate in risky projects. But relatively small firms may invest more for product safety because increasing their investments is not costly in case of bankruptcy.
키워드열기/닫기 버튼
limited liability, product safety.Mailing address: Hyung Bae, Department of Economics, Dongguk University,3-26 Pil-Dong Jung-Gu, Seoul 100-715, Korea.Phone: 82-2-2260-3271, Fax: 82-2-2260-3684, E-mail: hbae@dongguk.edu.1. INTRODUCTIONIn analyzing th
