nep-cfn New Economics Papers
on Corporate Finance
Issue of 2005‒04‒24
four papers chosen by
Zelia Serrasqueiro
Universidade da Beira Interior

  1. AN INTERVIEW WITH FRANCO MODIGLIANI By William Barnett; Robert Solow
  2. How do Early Stage High Technology Investors Select Their Investments? By B. CLARYSSE; M. KNOCKAERT; A. LOCKETT
  3. A Simple Model of Credit Rationing with Information Externalities By AKM Rezaul Hossain
  4. "An Analysis of Shareholders' Lists for 60 Cotton Spinning Companies in 1898" (in Japanese) By Tsuneo Suzuki; Yoichi Kobayakawa; Kazuo Wada

  1. By: William Barnett (Department of Economics, The University of Kansas); Robert Solow (MIT)
    Date: 2004–06
    Abstract: This study examines the selection behaviour of 68 European early stage high tech VCs. In particular, we examine whether or not these VCs exhibit heterogeneity in their selection behaviour. To examine these issues we employ a conjoint analysis methodology. Our results indicate that VCs exhibit substantial heterogeneity in investment selection behaviour. Employing a cluster analysis three types of investors emerge: those who focus on technology, those who focus on finance and those who focus on people. We then examine the drivers of these differences, being the sectoral focus, the sources of funds and the human capital of the investment manager.
    Date: 2005–03
  3. By: AKM Rezaul Hossain (University of Connecticut)
    Abstract: Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.
    Keywords: Credit rationing, Information Externalities, Adverse selection, Mortgage underwriting.
    JEL: C62 R31 R51
    Date: 2005–04
  4. By: Tsuneo Suzuki (Department of Economics, Gakushuin University); Yoichi Kobayakawa (Department of Management, College of Business, Administration and Information Science, Chubu University); Kazuo Wada (Faculty of Economics, University of Tokyo)
    Abstract: The cotton spinning companies played an important role in Japanese economic development during the Meiji era. Setting up these businesses required large capital investments. Who financed these companies? More concretely, who were their shareholders? This paper aims to identify shareholders' characteristics at 60 cotton spinning companies in 1898. In order to do this, we have created a database of all shareholders in these companies in 1898, as well as a database of all merchants and industrialists listed in the National Directory of Commerce and Industry (1898 edition). Our main findings are as follows: 1) Most of the shares were owned by people who lived outside the Tokyo or Osaka areas, in the local areas where a company was established. 2) The income level of most shareholders was mainly in the range of 500 - 2000 yen. The role of those with very high incomes as shareholder should not be overemphasized.
    Date: 2005–04

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