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What do internal capital markets do?: redistribution vs. incentives
Gautier, Axel; Heider, Florian - London School of Economics (LSE) - 2001
In this paper we explain the apparent diversification discount of conglomerates without assuming inefficent-cross subsidisation through internal capital markets. Instead we assume that an internal capital market efficiently redistributes scare resources across a conglomerates divisions between...
Persistent link: https://www.econbiz.de/10010745870
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Uncertainty and leveraged Lucas Trees: the cross section of equilibrium volatility risk premia
Vedolin, Andrea - London School of Economics (LSE) - 2012
uncertainty, namely (i) agents’ disagreement and (ii) time-varying volatility of fundamental growth rates. The paper shows that … orchard with heterogeneous beliefs, stochastic macro-economic uncertainty, and default risk. I study two manifestations of … moments of the risk premium distribution. Together with uncertainty, default risk associated with levered trees implies a non …
Persistent link: https://www.econbiz.de/10010745732
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Corporate ownership structure and performance in Europe
Grant, Jeremy; Kirchmaier, Thomas - London School of Economics (LSE) - 2004
In this paper, we show that ownership structures vary considerably across Europe, and that the dominant form of ownership is not necessarily the most efficient one. These findings are in contradiction to similar research based on US samples. The results also demonstrate that firms without a...
Persistent link: https://www.econbiz.de/10010884735
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Evolution of decision and control rights in venture capital contracts: an empirical analysis
Bienz, Carsten; Walz, Uwe - London School of Economics (LSE) - 2006
We analyze the structure and evolution of the allocation of decision and control rights in venture capital contracts by using a sample of 464 contracts between venture capitalists (VC) and portfolio firms from Germany. We focus on the evolution of control and decisions rights along three time...
Persistent link: https://www.econbiz.de/10010745436
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The dynamics of venture capital contracts
Bienz, Carsten; Hirsch, Julia - London School of Economics (LSE) - 2005
We analyze the degree of contract completeness with respect to staging of venture capital investments using a hand-collected German data set of contract data from 464 rounds into 290 entrepreneurial firms. We distinguish three forms of staging (pure milestone financing, pure round financing and...
Persistent link: https://www.econbiz.de/10010746202
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CEO incentive contracts in China: why does city location matter?
Bryson, Alex; Forth, John; Zhou, Minghai - London School of Economics (LSE) - 2013
CEO incentive contracts are commonplace in China but their incidence varies significantly across Chinese cities. We show that city and provincial policy experiments help explain this variance. We examine the role of two policy experiments: the use of Special Economic Zones (SEZs) to attract...
Persistent link: https://www.econbiz.de/10010884490
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Capital markets, ownership and distance
Carlin, Wendy; Charlton, Andrew; Mayer, Colin - London School of Economics (LSE) - 2006
This paper uses a new data-set to examine how internal capital markets and foreign ownership affect investment. Our data allow us to compare investment behaviour of listed subsidiaries with stand-alone firms while controlling for investment opportunities of parent and subsidiary firms. We...
Persistent link: https://www.econbiz.de/10010884649
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The effect of credit rationing on the shape of the competition-innovation relationship
Bena, Jan - London School of Economics (LSE) - 2009
Using a dynamic model of a step-by-step innovation race between financially constrained firms, I study how financial constraints affect innovation activity. The novel theoretical results derive from an analysis of the interaction between the incentive effect of competition on innovation and the...
Persistent link: https://www.econbiz.de/10010745834
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Choice of corporate risk management tools under moral hazard
Bena, Jan - London School of Economics (LSE) - 2006
This paper examines the choice of tools for managing a firm’s operational risks: cash reserves, insurance contracts, and financial assets under an optimal financing contract that solves moral hazard between insiders and outside investors. Risk management is valuable as it reduces the costs of...
Persistent link: https://www.econbiz.de/10010745872
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Survive another day: does uncertain financing affect the composition of investment?
Garicano, Luis; Steinwender, Claudia - London School of Economics (LSE) - 2013
We expect firms that face uncertainty about their access to the financial markets to prioritize shorter term …
Persistent link: https://www.econbiz.de/10010746023