Cressy, Robert - In: Journal of Global Entrepreneurship Research 2 (2014) 1, pp. 1-10
We develop a theory of managerial replacement in which a venture capitalist monitors an investee firm run by a manager of unknown quality (Good or Bad). An informative signal St correlated with performance (value-added) is available to the VC at a cost in each period t. The problem is when to...