How do financial constraints influence innovative activities of firms? In a two-period model of price competition with differentiated products we first analyze the incentives to innovate when both firms are self-financed. We then assume that one of the firms is financially constrained and...

How do financial constraints influence innovative activities of firms? In a two-period model of price competition with differentiated products we first analyze the incentives to innovate when both firms are self-financed. We then assume that one of the firms is financially constrained and...

Both equity and non-equity crowdfunding has proven to be a productive method of capital formation for start-ups. The equity crowdfunding provisions of The Jumpstart Our Business Startups Act (the “JOBS” Act) offer perhaps the most promising development to facilitate capital formation by...

This is the supplemental material to the paper titled "External Financing and Customer Capital: A Financial Theory of Markups." It includes additional empirical, theoretical, and quantitative results. It also includes illustration for the numerical algorithm for our model solution

This paper examines the interaction between venture risk, product market competition and entrepreneurs' choice between bank financing and venture capital (VC) financing. Under bank financing, a debt-type contract emerges as optimal, which allows the entrepreneur to retain full control of the...

We develop a continuous-time industry equilibrium model of monopolistic competition to understand how product markups are determined in the presence of external financing costs and customer capital. Firms optimally set markups to balance the tradeoff between profiting from their existing...

Dieses Diskussionspapier beleuchtet die PRME-Verpflichtung der Hochschule Pforzheim und die daraus resultierenden Probleme (Abschnitt 2) aus vier Perspektiven: der erkenntnistheoretischen (Abschnitt 3), der erfahrungswissenschaftlichen (Abschnitt 4), der juristischen (Abschnitt 5) und einer...

Dieses Diskussionspapier beleuchtet die PRME-Verpflichtung der Hochschule Pforzheim und die daraus resultierenden Probleme (Abschnitt 2) aus vier Perspektiven: der erkenntnistheoretischen (Abschnitt 3), der erfahrungswissenschaftlichen (Abschnitt 4), der juristischen (Abschnitt 5) und einer...

We examine banks' choice between two costly instruments used to identify good loan applicants: direct screening by acquiring borrower-specific information and collateral requirements. We show that with longer relationships the preference for screening increases both in initial and in later...

This paper studies the dual impact of increased competition on aggregate output in a setting with both oligopolistic competition and financial constraints. In the absence of financial constraints, more competition unambiguously increases output by reducing markup levels, which increases...