This paper considers the competitive effects of funding and collaboration alliances between established corporations and entrepreneurial potential rivals. We develop a formal setting to explore how in the presence of mutual agency conflicts, (i) cost efficiencies from resource sharing, (ii) the...

This work investigates the role of equity ownership for the purpose of committing the management to the pursuit of shareholder value in the presence of separation between ownership and control. By rooting the conflicts of interests between managers and shareholders upon the control of internal...

A large discrepancy exists on the use of the investment–cash flow sensitivity as a measure of financing constraints of firms. We examine this discrepancy by considering business group affiliated firms in Pakistan. The study includes 58 group affiliated firms and 32 non-group affiliated firms...

Using confidential Census data on U.S. manufacturing plants, we document that most of the dispersion in investment rates across plants occurs within firms instead of across firms. Between firm dispersion is almost acyclical, but within-firm dispersion is strongly procyclical. To investigate the...

This paper studies how sunk costs affect a financially constrained incumbent's ability to deter entry into its market. Sunk costs make it less attractive to the incumbent to accommodate entry by liquidating assets in place and exiting the market. This may render entry by a prospective rival...