In a three-period model with active and passive external corporate governance, this paper studies the endogenous decision of debt and equity financiers on the governance mode and intensity over their debtors, as well as how this may affect the funded firms' financing choice. We show that debt...

This paper presents a new explanation for the prevalence of convertible bond in venture capital finance. By modeling two-sided asymmetric information between entrepreneurs and venture capitalists, we prove that convertible bond can implement the optimal contract. The optimal conversion ratio...

This paper presents a new explanation for the prevalence of convertible security in venture capital finance. By modeling two-sided asymmetric information between entrepreneur and venture capitalist, we prove that convertible security can implement the optimal contract. Comparative statics shows...

This study develops a real options model of corporate divestitures wherein firms choose the optimal timing and conditions for a spin-off or sell-off. [A1] The divestiture timing has an inverse relationship with divestiture costs and a positive relationship with divestiture benefits. The choice...

A recent influx of Asian investment is changing the character of the Canadian oil and gas industry and reviving old debates on the regulation of foreign investment. Particular attention has been placed on investment by state-owned enterprises (SOEs), driven in part by public suspicion about...

The United States and China are at a turning point in their investment relationship. China’s previous investments in the US were predominantly in government securities, while other holdings were negligible. Recently, the accumulation of treasury securities has slowed and direct...

The dramatic rise of Chinese direct investment into the European Union has sparked a debate about the control that China may be seeking to take over European economies. Quite naturally these concerns have led to repeated calls that action be taken to slow down, if not to halt entirely, this...

Chinese state-owned enterprises (SOEs) and their overseas direct investment (ODI) have played an important role in China's economic development. But the rapid expansion of SOE-dominated ODI has also raised concerns, including about state capitalism and the need for competitive neutrality. This...

Foreign investment has played an important role in the Australian economy since the country's foundation. Part of the latest wave of foreign direct investment (FDI) in Australia has been by Chinese firms, and largely by state-owned enterprises with connections to the Chinese state. Despite the...