Similar Search Results

Financial Contracting Theory Meets The Real World: An Empirical Analysis Of Venture Capital Contracts

Kaplan, Steven; Strömberg, Per Johan - C.E.P.R. Discussion Papers - 2000

We compare the characteristics of real world financial contracts to their counterparts in financial contracting theory, by studying actual contracts between venture capitalists (VCs) and entrepreneurs. (1) The distinguishing characteristic of VC financing is that they allow VCs to separately...

Persistent link: https://www.econbiz.de/10005123862

Venture Capital Financing: The Role of Bargaining Power and the Evolution of Informational Asymmetry

Koskinen, Yrjö; Rebello, Michael; Wang, Jun - C.E.P.R. Discussion Papers - 2006

We model a situation where the entrepreneur has an informational advantage during the early stages of an investment project while the venture capitalist has the informational advantage during the later stages. We examine how this evolution of informational asymmetry affects venture investment...

Persistent link: https://www.econbiz.de/10005067345

How Often Should you Open the Door? Optimal Monitoring to Screen Heterogeneous Agents

Ichino, Andrea; Muehlheusser, Gerd - C.E.P.R. Discussion Papers - 2004

This Paper shows that over monitoring a partner in the initial phase of a relationship may not be optimal if the goal … monitoring too much we lose the opportunity to learn how the partner will behave when not monitored. Only by allowing the partner …

Persistent link: https://www.econbiz.de/10005504367

Macroeconomic Effects of Financial Shocks

Jermann, Urban; Quadrini, Vincenzo - C.E.P.R. Discussion Papers - 2009

suggests that the downturns in 1990-91 and 2001 were strongly influenced by changes in credit conditions. …

Persistent link: https://www.econbiz.de/10008528541

Preserving "Debt Capacity" or "Equity Capacity": A Dynamic Theory of Security Design under Asymmetric Information

Inderst, Roman; Vladimirov, Vladimir - C.E.P.R. Discussion Papers - 2014

In a dynamic model of optimal security design, we show when firms should preserve "equity capacity" through choosing high target leverage or "debt capacity" through choosing low target leverage. Thereby, firms reduce a problem of underinvestment or overinvestment when they must raise future...

Persistent link: https://www.econbiz.de/10011084368

A New Test of Capital Structure

Mayer, Colin; Sussman, Oren - C.E.P.R. Discussion Papers - 2004

This Paper reports a new test of capital structure theories. It uses a filtering technique to identify large investment spikes. We find that the spikes are predominantly financed with debt by large firms and by new equity by small loss-making firms. In the process, firms move significantly away...

Persistent link: https://www.econbiz.de/10005067393

Smuggling Humans: A Theory of Debt-Financed Migration

Friebel, Guido; Guriev, Sergei - C.E.P.R. Discussion Papers - 2004

We introduce financial constraints in a theoretical analysis of illegal immigration. Intermediaries finance the migration costs of wealth-constrained migrants, who enter temporary servitude contracts to pay back the debt. These debt/labour contracts are more easily enforceable in the illegal...

Persistent link: https://www.econbiz.de/10005666428

Dynamic Security Design

Biais, Bruno; Mariotti, Thomas; Plantin, Guillaume; … - C.E.P.R. Discussion Papers - 2004

We analyse dynamic financial contracting under moral hazard. The ability to rely on future rewards relaxes the tension between incentive and participation constraints, relative to the static case. Managers are incited by the promise of future payments after several successes and the threat of...

Persistent link: https://www.econbiz.de/10005067486

Credit Risk Analysis and Security Design

Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2003

This Paper considers the potential cost of subjective judgement and discretion in credit decisions. We show that …. Unless the lender obtains the full NPV her credit decision is too conservative, i.e., she uses too high a hurdle rate. Given … other things, this suggests that the common folk wisdom whereby giving banks equity makes them less cautious in their credit …

Persistent link: https://www.econbiz.de/10005661840

Informed Lending and Security Design

Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2005

We examine the role of security design when lenders make inefficient accept-or-reject decisions after screening projects. Lenders may be either 'too conservative', in which case they reject positive-NPV projects. Or they may be 'too aggressive', in which case they accept negative-NPV projects....

Persistent link: https://www.econbiz.de/10005666447