The Impacts of Risk Attitude and Information Structure on Corporate Political Activity in Equipment Procurement: A Linear Contract Model

Author

Liu, Hai-long ; Li, Jian

Author_Institution

Sch. of Manage. & Econ., Beijing Inst. of Technol., Beijing, China

fYear

2009

fDate

23-24 May 2009

Firstpage

1

Lastpage

3

Abstract

Corporate political activity (CPA) is an important factor in the principal-agent relationship between equipment firms and the military during highly administrative equipment procurement activities. Based on a linear contract model, we find a negative relationship between CPA supply and the degree of risk aversion of equipment firm, and an adverse supply of CPA with hidden information possessed by the military, making the equipment market would eventually disappeared.

Keywords

defence industry; military equipment; politics; procurement; risk management; CPA supply; administrative equipment procurement; corporate political activity; equipment firms; equipment market; information structure; linear contract model; military; principal-agent relationship; risk attitude; risk aversion degree; Contracts; Environmental economics; Ethics; Government; Hazards; Military equipment; Monopoly; Procurement; Production; Uncertainty;

fLanguage

English

Publisher

ieee

Conference_Titel

E-Business and Information System Security, 2009. EBISS '09. International Conference on

Conference_Location

Wuhan

Print_ISBN

978-1-4244-2909-7

Electronic_ISBN

978-1-4244-2910-3

Type

conf

DOI

10.1109/EBISS.2009.5138118

Filename

5138118