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This paper offers a new explanation for the prevalent use of convertible securities in venture capital finance. Convertible securities can be used to endogenously allocate cash flow rights as a function of the realized quality of the project. This property can be used to mitigate the double...
Persistent link: https://www.econbiz.de/10005666482
When a young entrepreneurial firm matures, it is often necessary to replace the founding entrepreneur by a professional manager. This replacement decision can be affected by the private benefits of control enjoyed by the entrepreneur which gives rise to a conflict of interest between the...
Persistent link: https://www.econbiz.de/10005124147
One explanation for the poor performance of regulation in the recent financial crisis is that regulators had been captured by the financial sector. We present a micro-founded model with rational agents in which banks capture regulators by their sophistication. Banks can search for arguments of...
Persistent link: https://www.econbiz.de/10011083329
We study how rich shareholders can use their economic power to deregulate firms that they own, thus skewing the income distribution towards themselves. Agents differ in productivity and choose how much labor to supply. High productivity agents also own shares in the productive sector and thus...
Persistent link: https://www.econbiz.de/10011083884
There are few if any technical problems involved in reversing the unconventional monetary policies - quantitative easing, credit easing and enhanced credit support - implemented by central banks around the world as short-term nominal interest rates became constrained by the zero lower bound. The...
Persistent link: https://www.econbiz.de/10008557018
Recent research on central bank governance has focused mainly on their monetary policy task. As the sub-prime loan market turmoil reminded us - central banks play a crucial role in financial markets not only in setting monetary policy, but also in ensuring their soundness and stability. In this...
Persistent link: https://www.econbiz.de/10005656403
The purpose of this paper is to suggest how institutions can be created and modified to devise and implement industrial policy in the emerging market economies. Two main issues confronting industrial policy institutions are how to avoid regulatory capture, that is, having those policy-makers...
Persistent link: https://www.econbiz.de/10005791806
This paper analyzes optimal re-election bars when incumbents gain socially valuable experience in office. We develop a … two-period model in which the output of a public good depends on an office-holder's effort, ability and experience. When …. Together, these effects outweigh the expected loss of incumbents' acquired experience, which results from their reduced chances …
Persistent link: https://www.econbiz.de/10011083310
The standard assumption in economic theory is that preferences do not change as a result of experience with the … as experience is accumulated. This paper tests the effect of experience with a health-care service on preferences for … maternity-ward attributes. In order to explore the effect of experience on preferences, the research sample was decomposed into …
Persistent link: https://www.econbiz.de/10005656214
substitution of low education / high experience workers by low experience / high education workers by using US and French microdata … explain the changes in returns to experience. It also accounts for a part of the increase in returns to education between 1980 …: the elasticity of substitution between experience and education, which is found to be less than half. In France, the …
Persistent link: https://www.econbiz.de/10005656354