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Massachusetts Institute of Technology. Denis Gromb and Bengt Holmstrom.
Massachusetts Institute of Technology Date Issued: This dissertation presents three essays in Corporate Finance. In the first essay, I study managerial incentives in internal capital markets. I also show that, while diversified firms have an advantage in allocating resources, this may come at the expense of managerial incentives.
Based on the analysis, the paper relates the value of diversification to characteristics of the firm, the industry, the external capital market, and the internal capital market.
In the second essay, I propose a model of entrepreneurship in which investors decide whether to become venture capitalists or to form firms and entrepreneurs decide whether to join a firm or seek financing in the venture capital market. The venture capital market allows better matching between investors and entrepreneurs, but this comes at the cost of adverse selection.
The model suggests that as a sector matures, innovation takes place first within firms, then in ventures backed by venture capitalists backed ventures, and finally within firms again.
The third essay, which is co-authored with Andres Almazan, examines how the trading activities of institutional investors can help to mitigate agency conflicts in corporations.
The access of institutional investors to privileged information produces an adverse selection effect that reduces the trading activity of institutional investors and generates a free-rider problem that affects the intensity with which institutional investors wish to "vote with their feet".
We also study ownership implications, incentives to acquire information and the interaction of the Wall Street Rule with other mechanisms of governance i.Corporate finance: Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions.
The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. Find essays and research papers on Corporate finance at timberdesignmag.com We've helped millions of students since Join the world's largest study community.
Nov 30, · Living in Florida and New York, they started a series of companies. Oesterlund came up with most of the ideas, Pursglove would later state in court filings, and ran the companies day to day. Published: Mon, 5 Dec This chapter is divided into two sections.
The first section defines culture, its importance in international business and the various cultural dimensions for working globally. Mar 20, · Over the last five years, a gradual evolution — characterized by careful and savvy boundary pushing — has taken hold in a genre where innovation always tugs against preservation.
This dissertation presents three essays in Corporate Finance. In the first essay, I study managerial incentives in internal capital markets. In particular, I develop a two-tiered agency model to study division managers' incentives within internal capital markets.