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on Corporate Finance |
| By: | Dutta, Sourish |
| Abstract: | The crucial and growing role performed by different financial intermediaries such as venture capitalists and angel investors as well as more traditional intermediaries such as commercial banks in developing entrepreneurial or innovative firms and boosting product market innovations has led to great research interest in the economics of innovation and entrepreneurial finance. Besides this, there are some important factors or developments which have affected the entrepreneurial finance in general as well as its influence upon different entrepreneurial or innovative firms. Indeed, it is also true that the financial and ownership structures of the different entrepreneurial firms and the legal as well as institutional environment, in which they operate, itself affects the product market innovations (Chemmanur and Fulghieri, 2014). .Therefore, in this paper I want to target a broad theme i.e. analysis of the mechanisms behind this scenario, especially, in the context of Indian market system. |
| Keywords: | Innovation, Financing Frictions, Entrepreneurial Finance |
| JEL: | G11 G24 O31 O32 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75584&r=cfn |
| By: | Bo Young Chang; Greg Orosi |
| Abstract: | There is a close link between prices of equity options and the default probability of a firm. We show that in the presence of positive expected equity recovery, standard methods that assume zero equity recovery at default misestimate the option-implied default probability. We introduce a simple method to detect stocks with positive expected equity recovery by examining option prices and propose a method to extract the default probability from option prices that allows for positive equity recovery. We demonstrate possible applications of our methodology with examples that include large financial institutions in the United States during the 2007–09 subprime crisis. |
| Keywords: | Asset Pricing, Financial markets, Market structure and pricing |
| JEL: | G13 G33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:16-58&r=cfn |
| By: | Ammari, Aymen; Bouteska, Ahmed; Regaieg, Boutheina |
| Abstract: | This study revisits the link between CEO Entrenchment and performance from a sample of 1.040 annual observations concerning 138 CEOs of French-listed firms for the 2000-2013 period. The effect of entrenchment, which seems to represent an illustration of the effectiveness of control mechanisms that CEOs are supposed to undergo within firms, reveals ambiguous findings. The financial woes, suffered by some firms such as France Telecom, Vivendi Universal and Eurotunnel testify to the magnitude of this inefficiency and usefulness to discuss corporate governance principles. The VIENOT reports 1 and 2 and the Bouton report have come forward presenting recommendations aimed at implement a system of corporate governance where moral ethics of different actors, confidence, transparency and respect for the interests of stakeholders are consistent. The purpose of this paper is thus to understand the impact of entrenchment on French firm performance. A key aspect of our study is the use of Nonlinear Principal Component Analysis (NLPCA), which is preferred to standard principal component analysis as a more effective method to distill the complex dimensions of CEO Entrenchment into reliable summary scores. Using fixed/random effect models which control of different source of heterogeneity, we find that CEO Entrenchment has a modest association with operating measures of performance (i.e. ratio of earnings to total assets, ROA) and with market-based measures of performance (i.e. Tobin’s Q). The empirical findings also indicate that the magnitude of the economic significance of the entrenchment proxies in the performance models depends on the method utilized to measure CEO Entrenchment. |
| Keywords: | Entrenchment; Performance; Nonlinear Principal Component Analysis. |
| JEL: | G02 G3 G32 |
| Date: | 2016–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75529&r=cfn |