The structures of entrepreneurial finance and control have changed profoundly worldwide, given by new capital market instruments, a growing role of nonbank financial intermediaries, and an increasing division of labor among market participants. The present paper discusses whether this implies a...

We examine a sample of firms that adopt quot;target ownership plans,quot; under which managers are required to own a minimum amount of stock. We find that prior to plan adoption, such firms exhibit low managerial equity ownership and low stock price performance. Managerial equity ownership...

Recent theoretical work suggests that outside investor control may have costs as well as benefits, particularly in small, entrepreneurial firms. The possibility of investor opportunism can reduce an entrepreneur's incentives to invest personal effort into the firm. I investigate this issue in...

Recent theoretical work suggests that outside equity monitoring and control come with costs as well as benefits, especially in small, entrepreneurial firms. These costs arise when outside investors undervalue any private benefits of control that may accrue to an entrepreneur. The resulting...

Equity participations affect the hold-up problem in two ways. On the one hand, they allow to reduce the externality that is created ex-post by hold-up. On the other hand, they change the bargaining positions by partially internalizing the threat of walking away from the bargaining. It turns out...

In continental Europe, banks are more and more replaced by non-bank institutional investors in the financing and control of firms. This must not imply a shift to arm's length finance, if these institutional investors develop relationships with firms similar to the traditional longterm bank-firm...

The financial systems in continental Europe are moving from bank intermediation to intermediation by non-bank institutional investors. The present paper examines to what extent this implies a substitution of relationship finance by arm’s length finance or just of one form of relationship...

The financial systems in continental Europe are subject to profound changes in the institutions of market exchange. Banks traditionally holding close relationships with firms are substituted by non-bank institutional investors. The present paper examines whether this implies a substitution of...

The financial systems in continental Europe are subject to profound changes in the institutions of market exchange. Banks traditionally holding close relationships with firms are substituted by non-bank institutional investors. The present paper examines whether this implies a substitution of...

The most influential approach of corporate governance, the view of shareholders supremacy does not take into consideration that the key task of modern corporations is to generate and transfer firm-specific knowledge. It proposes that, in order to overcome the widespread corporate scandals, the...