We examine the dynamics of the positive sorting in the venture capital industry. Our findings indicate that switching lead VCs is not uncommon during the course of entrepreneurial firms' development. Companies with upwardly revised perceived quality are more likely to switch to more reputable...

This paper tests the idea that financial regulation can impact performance persistence in the context of the hedge fund industry in 48 countries over the years 1994-2008. The data show evidence of three types of regulation influencing performance persistence: (1) minimum capital restrictions,...

We provide evidence for a significant relation between diversification and performance in the hedge fund industry. Measuring diversification across four distinct dimensions, we find a significant positive relation between hedge fund performance and diversification across sectors and asset...

We examine the dynamics of the positive sorting in the venture capital industry. We empirically show that there is considerable re-balancing of the VC-company matches. We further find that higher-quality companies associated with less reputable VCs are more likely to switch to more reputable...

This paper examines local bias in the context of venture capital (VC) investments. Based on a sample of US VC investments between 1980 and June 2009, we find more reputable VCs (older, larger, more experienced, and with stronger IPO track record) and VCs with broader networks exhibit less local...

This paper introduces a cross-country law and finance analysis of the regulatory impact on the level of capital flows and the sensitivity of capital flows in response to prior performance (that is, the ‘flow-performance' relationship) in the hedge fund industry. The data indicate that...

This paper introduces a cross-country law and finance analysis of the misreporting behavior in the hedge fund industry in terms of smoothing returns so that a fund consistently generates positive returns. We find strong evidence that international differences in hedge fund regulation are...

Delaware hedge funds exhibit significant differences in contractual structure in terms of higher management and incentive fees. Delaware funds are more likely to use high watermark provisions and less likely to invest their personal capital. Both the redemption notice periods and lock up periods...

This paper examines the effect of fund size on investee firm valuations in the venture capital market. We show a convex (U-shape) relationship between fund size and firm valuations. We further document firm valuations are positively correlated to measures of limited attention. In addition, we...

This paper tests the idea that financial regulation can impact performance persistence in the context of the hedge fund industry in 48 countries over the years 1994-2008. The data show evidence of three types of regulation influencing performance persistence: (1) minimum capital restrictions,...