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 the dynamics of private firms' exit choice between IPOs and acquisitions and the valuation premium of IPOs over acquisitions from pre-2000 to post-2000. We first develop a two-period theoretical model, where in each period, entrepreneurs with private information about the viability of...

We analyze the optimality of allowing disclosures of different types of information before equity offerings and of alternative rules for private securities litigation, where courts may penalize unduly optimistic disclosures ex post. In our model, firm insiders, with private information about...

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...

While limited-recourse project financing has been used extensively to finance large infrastructure projects, the rationale for its use is not well understood. In this paper, we develop a dynamic model of a firm’s choice between limited-recourse project financing (separate debt issued against...

We examine the role of placement agents in private investments in public equity (PIPE) deals of firms that went public via a reverse merger (RM). We find that reputable placement agents with greater expertise (expert agents) help RM firms to complete their PIPE deals in a smaller number of...