We develop a theory of the management of innovation and equity carve-outs under heterogeneous beliefs among investors in the equity market. We consider a setting where an employee of a firm generates an idea for a new project (ldquo;innovationrdquo;) which can be financed either by issuing...

We develop a theory of new project financing and equity carve-outs under heterogeneous beliefs among investors in the equity market. We consider a setting where an employee of a firm generates an idea for a new project that can be financed either by issuing equity against the future cash flows...

We develop a theory of the interaction between product market competition, corporate spin-offs, and innovation. In our model, a conglomerate firm operates a profitable existing technology, but has access to a new technology into which it must invest to develop a commercially viable product....

While limited-recourse project financing has been used extensively to finance large infrastructure projects, the rationale for its use is not well understood. In this paper, we develop a dynamic model of a firm’s choice between limited-recourse project financing (separate debt issued against...

We theoretically analyze the optimal contracts and the capital structure of public-private partnerships (PPPs) formed to implement infrastructure projects under a limited-recourse project financing arrangement. In our model, a sponsoring company and a host government set up a project company in...

We develop measures of the management quality of firms and make use of a unique sample of hand-collected data to examine the relationship between the reputation and quality of a firm's management and its financial policies, a relationship that has so far received little attention in the...

We develop measures of the management quality of firms and make use of a unique sample of hand-collected data to examine the relationship between the reputation and quality of a firm's management and its financial and investment policies, a relationship that has so far received little attention...

We address the question: At what stage in its life should a firm go public, rather than undertake its projects using private equity financing? In our model, a firm may raise external financing either by placing shares privately with a risk-averse venture capitalist, or by selling shares in an...

Using a hand-collected data set of private firm acquisitions and IPOs, this paper develops the first empirical analysis in the literature of the "IPO valuation premium puzzle," which refers to a situation where many private firms choose to be acquired rather than to go public at higher...

The U.S. equity markets have experienced a remarkable decline in IPOs since 2000, both in terms of smaller IPO volume and entrepreneurial firms' greater tendency to exit through acquisitions rather than IPOs. Using proprietary U.S. Census data on private firms, we conduct a comprehensive...