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and short-term planning horizon can also lead to such underinvestment. Subsequently, banks can stimulate growth …-enhancing investment in relationship-specific assets by signalling creditworthiness and long-term planning horizon of their borrowers. We … empirically confirm this hypothesis by showing that industries dependent on relationship-specific investment from their suppliers …
Persistent link: https://www.econbiz.de/10010274757
productive and active VC industry boosts innovation driven growth. …The paper proposes a simple equilibrium model of venture capital, entrepreneurship and innovation. Venture capitalists …
Persistent link: https://www.econbiz.de/10010315460
This paper proposes a growth-oriented dual-income tax by combining an allowance for corporate equity with a broadly … demonstrates the neutrality properties of the reform with respect to investment, firm financial decisions and organizational choice …. Tax rates are chosen to prevent income shifting from labor to capital income. The reform decisively strengthens investment …
Persistent link: https://www.econbiz.de/10010271071
Crowdfunding provides innovation in enabling entrepreneurs to contract with consumers before investment. Under …
Persistent link: https://www.econbiz.de/10011555542
In financing start-up firms, venture capitalists carefully select among alternative projects, design incentive compatible financial contracts and support portfolio companies with value enhancing managerial advice. This paper considers how venture capitalists can induce selfselection among...
Persistent link: https://www.econbiz.de/10010276036
We suggest an explanation for the existence of “mission drift”, the tendency for Microfinance Institutions (MFIs) to lend money to wealthier borrowers rather than to the very poor. We focus on the relationship between MFIs and external funding institutions. We assume that both the MFIs and...
Persistent link: https://www.econbiz.de/10013245624
Financial sector development plays an important role in promoting economic growth and welfare of the citizen of a … country. On the other hand, financial sector instability or vulnerability, can adversely affect the economic growth and cause … stock markets. This could bring significant benefits for Brunei Darussalam including enhanced growth. …
Persistent link: https://www.econbiz.de/10013427746
Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...
Persistent link: https://www.econbiz.de/10014083046
Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have … higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases a startup's likelihood of … reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched …
Persistent link: https://www.econbiz.de/10012861411
Business groups in emerging markets perform better than unaffiliated firms. One explanation is that business groups substitute some functions of missing institutions, for example, enforcing contracts. We investigate this by setting up a model where firms within the business group are connected...
Persistent link: https://www.econbiz.de/10010263949