Showing 1 - 5 of 5
An increasingly large share of cross-border acquisitions are undertaken by private equity-firms (PE-firms) and not by traditional multinational enterprises (MNEs). We propose a model of crossborder acquisitions in which MNEs and PE-firms compete over domestic assets. MNEs' advantage lies in...
Persistent link: https://www.econbiz.de/10010472515
We show how temporary ownership by private equity firms affects industry structure, competition and welfare. Temporary ownership leads to strong investment incentives because equilibrium resale prices are determined by buyers incentives to block rivals from obtaining assets. These incentives...
Persistent link: https://www.econbiz.de/10013078529
Persistent link: https://www.econbiz.de/10011811991
We analyze incentives to develop entrepreneurial ideas for venture capitalists (VCs) and incumbent firms. If VCs are sufficiently better at judging an idea's value and if it is sufficiently more costly to patent low than high value ideas, VCs acquire valuable ideas, develop them beyond the level...
Persistent link: https://www.econbiz.de/10009643508
This paper constructs a model where entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We first show that aggressive development of a basic innovation by better informed...
Persistent link: https://www.econbiz.de/10005835952