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A Monte Carlo Comparison between the Free Cash Flow and Discounted Cash Flow Approaches

Akalu, Mehari Mekonnen; Turner, Rodney - Tinbergen Institute - 2002

One of the debates in the capital budgeting model selection is between the free cash flow and DCF methods. In this paper an attempt is made to compare SVA against NPV model based on Monte Carlo simulations. Accordingly, NPV is found less sensitive to value driver variations and has got higher...

Persistent link: https://www.econbiz.de/10005137022

Evaluating the Capacity of Standard Investment Appraisal Methods

Akalu, Mehari Mekonnen - Tinbergen Institute - 2002

The survey findings indicate the existence of gap between theory and practice of capital budgeting. Standard appraisal methods have shown a wider project value discrepancy, which is beyond and above the contingency limit. In addition, the research has found the growing trend in the use of value...

Persistent link: https://www.econbiz.de/10005137133

The Political Economy of Dominant Investors

Perotti, Enrico C.; Thadden, Ernst-Ludwig von - Tinbergen Institute - 2004

We allow the preference of a political majority to determine both the corporate governance structure and the division of profits between human and financial capital. In a democratic society where financial wealth is concentrated, a political majority may prefer to restrain governance by...

Persistent link: https://www.econbiz.de/10005137317

Disciplining and Screening Top Executives

Martinez, Silvia Dominguez; Swank, Otto H.; Visser, Bauke - Tinbergen Institute - 2006

Boards of directors face the twin task of disciplining and screening executives. To perform these tasks directors do not have detailed information about executives' behaviour, and only infrequently have information about the success or failure of initiated strategies, reorganizations, mergers...

Persistent link: https://www.econbiz.de/10005016271

Acquisitions as a Real Options Bidding Game

Smit, Han T.J.; Berg, Ward A. van den; Maeseneire, Wouter De - Tinbergen Institute - 2004

option on a bundle of resources. Competing potential buyers may sequentially perform due diligence and incur costs (option …). The first player’s bid provides a signal on its own and rivals’ target value, thereby affecting potential bidders’ option … value. The level of information costs and the option value, affected by heterogeneity between bidders (correlation), their …

Persistent link: https://www.econbiz.de/10005144572

Entrepreneurship and Economic Transition

Aidis, Ruta - Tinbergen Institute - 2003

Identification of the entrepreneur's economic function has engaged economists for more than 200 years. In this paper we address the issue of entrepreneurship in two distinct ways: a) as it has historically developed within the field of economics and b) as it develops in the transitional context....

Persistent link: https://www.econbiz.de/10005209447

The Entrepreneur's Mode of Entry: Business Takeover or New Venture Start?

Parker, Simon C.; Praag, C. Mirjam van - Tinbergen Institute - 2006

We analyse the decision to become an entrepreneur by either taking over an established business or starting a new venture from scratch. A model is developed which predicts how several individual- and firm-specific characteristics influence entrepreneurs' entry mode. The new venture creation mode...

Persistent link: https://www.econbiz.de/10005209489

Total Factor Productivity and the Role of Entrepreneurship

Erken, Hugo; Donselaar, Piet; Thurik, Roy - Tinbergen Institute

Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that – when this variable is added...

Persistent link: https://www.econbiz.de/10005016255

Does Entrepreneurship reduce Unemployment?

Audretsch, D.B.; Carree, M.A.; Thurik, A.R. - Tinbergen Institute - 2001

n this paper, we develop two hypotheses: First, regional innovation efforts have a positive impact on regional knowledge based entrepreneurial activity. Second, knowledge based entrepreneurship positively affects regional economic performance. We test these hypotheses using county level data...

Persistent link: https://www.econbiz.de/10005144397

Entrepreneurship Selection and Performance

Sluis, Justin van der; Praag, Mirjam van; Vijverberg, Wim - Tinbergen Institute - 2003

This meta-analytical review of empirical studies of the impact of schooling on entrepreneurship selection and performance in developing economies looks at variations in impact across specific characteristics of the studies. A marginal year of schooling in developing economies raises enterprise...

Persistent link: https://www.econbiz.de/10005144501