We analyze the roles of entrepreneurs, venture capitalists (VC), and the government in financing fundamental innovations, defined as those with positive social value net of development costs, but negative net present values to innovating firms. We first analyze the case where the entrepreneur,...

We analyze a firm's choice between dividend payments and stock repurchases under heterogeneous beliefs and the subsequent long-term stock return performance of firms adopting the two forms of payout. Firm insiders, owning a certain fraction of its equity, choose between paying out its cash...

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 new-project financing and equity carve-outs under heterogeneous beliefs. In our model, an employee of a firm generates an idea for a new project that can be financed either by issuing equity against the cash flows of the entire firm ("integration"), or by undertaking an...