We study a regional economy with a large number of entrepreneurs who own firms and who want to go public. Specifically, our analysis focuses on the contractual interaction between a representative risk averse entrepreneur who owns a firm and a risk neutral monopolistic investment bank that...

We study a regional economy with a large number of entrepreneurs who own firms and who want to go public. Specifically, our analysis focuses on the contractual interaction between a representative risk averse entrepreneur who owns a firm and a risk neutral monopolistic investment bank that...

We use a two period model to analyze the contractual relationship between entrepreneurs and venture capitalists in an open regional economy. First, we describe the first best investment contract, we study the second best investment contract in the presence of private information, and then we...

We analyze the activities of an entrepreneur who must, at each date, decide whether to search for a new production technique or to produce output with an extant technique. Our analysis leads to four results. First, we show that if our entrepreneur rejects a particular production technique at a...