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We characterize optimal IPO design in the distinct adverse selection problems: one affecting the IPO stage and one arising in the after-market. Allocating shares to an investor with superior information in the after-market depresses the share's value to less informed investors. However, because...
Persistent link: https://www.econbiz.de/10003581262
We provide elementary insights into the effectiveness of certification to increase market transparency. In a market with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device. This difference alone implies that seller-certification...
Persistent link: https://www.econbiz.de/10011491434
There are competing arguments about the likely effects of Sovereign Bond-Backed Securitisation on the liquidity of sovereign bond markets. By analysing hedging and diversification opportunities, this paper shows that positive liquidity spillovers would dominate or at least constrain the extent...
Persistent link: https://www.econbiz.de/10011848364
This paper examines firms’ market entry strategies for quality differentiated goods, focusing on both initial and subsequent product-level entry decisions. Using a theoretical framework incorporating nonhomothetic preferences, we show that premium products are more likely to enter wealthier...
Persistent link: https://www.econbiz.de/10015166972
I outline the effect of business networks on trade, FDI and welfare in a two-country, two-firm duopoly. The network effect, following Greaney (2002), is modelled as a marginal cost disadvantage facing a firm from Foreign in selling to Home. Unlike traditional trade costs, this cost cannot be...
Persistent link: https://www.econbiz.de/10009724411
Relying on a large foreign direct investment (FDI) transaction level dataset, unique both in terms of disaggregation and time and country coverage, this paper examines patterns in greenfield (GF) versus merger & acquisition (MA) investment. Although both are found to seek out large markets with...
Persistent link: https://www.econbiz.de/10010479021
Among the many concerns over globalization is that as nations compete for mobile firms, they will relax labour standards as a method of lowering costs and attracting investment. Using spatial estimation on panel data for 148 developing countries over 18 years, we find that the labour standards...
Persistent link: https://www.econbiz.de/10009732552
This paper studies how transport infrastructure investments affect a bidding war for a firm between two asymmetric countries within a region in a context of imperfect competition, where transport infrastructure investments play the role of a global public good, leading to a reduction in the unit...
Persistent link: https://www.econbiz.de/10011723862