The Experts below are selected from a list of 61680 Experts worldwide ranked by ideXlab platform
Kjell G. Nyborg - One of the best experts on this subject based on the ideXlab platform.
-
Financing and Corporate Growth under repeated moral hazard
Journal of Financial Intermediation, 2011Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:We develop an incomplete contracts model to study the extent to which control rights of different financings affect Corporate Growth. The model admits a standard hold-up problem under equity financing; insiders may be disincentivized to do R&D because outside investors can use their control rights to expropriate large parts of the returns by hiring more efficient managers in the future. Debt financing may give rise to a double moral hazard problem; both managers and shareholders may divert Corporate resources to themselves before debt is serviced. However, in many cases, these phenomena do not occur in equilibrium and control rights are irrelevant. Cross-sectional predictions are derived from those cases where control rights matter. Consistent with the empirical evidence, leverage is inversely related to Growth and to profitability
-
financing and Corporate Growth under repeated moral hazard
LSE Research Online Documents on Economics, 2001Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:This paper considers the impact of financial contracting on Growth by exploring a model where entrepreneurs initially do R&D but subsequently need both outside investors to provide funds for capital investments and outside mangers to operate the firm efficiently some time after assets are in place. The source of contracting inefficiency is that insiders can divert cash flows for their own benefit. We employ a repeated games framework which allows us to model outside equity as well as inside equity and debt. We call our framework the two-stage model of firm Growth. A key finding is that outside equity promotes ex post efficiently (second stage Growth) at the expense of ex ante efficiently (first stage Growth) which debt work the opposite way. This is because equity promotes replacement of the entrepreneur, while debt promotes entrenchment. So debt has the disadvantage that it is less conducive to the implementation of second stage Growth than equity, but the advantage that it provides the entrepreneur with more incentives to do R&D in the first place. Furthermore, equity is fragile, in the sense that moral hazard may be so high that investors will not finance the firm, regardless of the discount rate. In contrast, debt financing definitely can be raised for low discount rates. a prediciton of the model is that in a cross-section of firms, we should observe a preponderance of high levered, closely-held firms which have stagnated after an early Growth phase.
-
Financing and Corporate Growth under Repeated Moral Hazard
SSRN Electronic Journal, 2000Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:We develop an incomplete contracts model to study the extent to which control rights of different financings affect Corporate Growth. The model admits a standard hold-up problem under equity financing; insiders may be disincentivized to do RD both managers and shareholders may divert Corporate resources to themselves before debt is serviced. However, in many cases, these phenomena do not occur in equilibrium and control rights are irrelevant. Cross-sectional predictions are derived from those cases where control rights matter. Consistent with the empirical evidence, leverage is inversely related to Growth and to profitability.
Ronald W. Anderson - One of the best experts on this subject based on the ideXlab platform.
-
Financing and Corporate Growth under repeated moral hazard
Journal of Financial Intermediation, 2011Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:We develop an incomplete contracts model to study the extent to which control rights of different financings affect Corporate Growth. The model admits a standard hold-up problem under equity financing; insiders may be disincentivized to do R&D because outside investors can use their control rights to expropriate large parts of the returns by hiring more efficient managers in the future. Debt financing may give rise to a double moral hazard problem; both managers and shareholders may divert Corporate resources to themselves before debt is serviced. However, in many cases, these phenomena do not occur in equilibrium and control rights are irrelevant. Cross-sectional predictions are derived from those cases where control rights matter. Consistent with the empirical evidence, leverage is inversely related to Growth and to profitability
-
financing and Corporate Growth under repeated moral hazard
LSE Research Online Documents on Economics, 2001Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:This paper considers the impact of financial contracting on Growth by exploring a model where entrepreneurs initially do R&D but subsequently need both outside investors to provide funds for capital investments and outside mangers to operate the firm efficiently some time after assets are in place. The source of contracting inefficiency is that insiders can divert cash flows for their own benefit. We employ a repeated games framework which allows us to model outside equity as well as inside equity and debt. We call our framework the two-stage model of firm Growth. A key finding is that outside equity promotes ex post efficiently (second stage Growth) at the expense of ex ante efficiently (first stage Growth) which debt work the opposite way. This is because equity promotes replacement of the entrepreneur, while debt promotes entrenchment. So debt has the disadvantage that it is less conducive to the implementation of second stage Growth than equity, but the advantage that it provides the entrepreneur with more incentives to do R&D in the first place. Furthermore, equity is fragile, in the sense that moral hazard may be so high that investors will not finance the firm, regardless of the discount rate. In contrast, debt financing definitely can be raised for low discount rates. a prediciton of the model is that in a cross-section of firms, we should observe a preponderance of high levered, closely-held firms which have stagnated after an early Growth phase.
-
Financing and Corporate Growth under Repeated Moral Hazard
SSRN Electronic Journal, 2000Co-Authors: Ronald W. Anderson, Kjell G. NyborgAbstract:We develop an incomplete contracts model to study the extent to which control rights of different financings affect Corporate Growth. The model admits a standard hold-up problem under equity financing; insiders may be disincentivized to do RD both managers and shareholders may divert Corporate resources to themselves before debt is serviced. However, in many cases, these phenomena do not occur in equilibrium and control rights are irrelevant. Cross-sectional predictions are derived from those cases where control rights matter. Consistent with the empirical evidence, leverage is inversely related to Growth and to profitability.
Paul Geroski - One of the best experts on this subject based on the ideXlab platform.
-
Understanding the implications of empirical work on Corporate Growth rates
Managerial and Decision Economics, 2005Co-Authors: Paul GeroskiAbstract:This paper builds on the empirical literature on Corporate Growth rates - which suggests that Corporate Growth rates are very nearly random - and asks whether this empirical work is consistent with standard theories of the firm. We examine both static and dynamic optimizing models of firm output choice, before moving on to examine production functions modelling of Corporate learning, models of R&D competition and diversification. In all cases, it seems clear that random Corporate Growth rates are more or less exactly what one would expect these models to predict. However, the literature on Penrose effects - dynamic managerial limitations to Growth - and Corporate competencies are not easy to reconcile with random Corporate Growth rates. Copyright © 2005 John Wiley & Sons, Ltd.
-
Corporate Growth convergence in Europe
Oxford Economic Papers, 2004Co-Authors: Paul Geroski, Klaus GuglerAbstract:It is widely believed that the implementation of the Single Market Programme in 1992 has had an impact on national markets in Europe, and some people have argued that it has induced a convergence in industrial structures across countries. Using a newly available database, however, covering nearly every firm above 100 employees in 14 European countries over the time period 1994 to 1998, we do not find strong evidence for ‘convergence’ in manufacturing in Europe. ‘Full’ convergence in Corporate sizes within industries is unambiguously rejected by the data, although there may be some industries where some form of conditional convergence is observed. A Gibrat process best describes the Growth of very large and mature firms; but smaller and younger firms depart from this prediction. While we can identify significant correlates of Growth such as firm size, age or the internal organization of the firm, most of the variation in Corporate Growth remains unpredictable.
-
Corporate Growth and Profitability
The Journal of Industrial Economics, 2003Co-Authors: Paul Geroski, Stephen Machin, Christopher F. WaltersAbstract:This paper argues that current period Corporate Growth rates reflect changes in current expectations about the long run profitability of a firm. This means that Growth rates are likely to vary randomly over time. Using data from 271 large, quoted U.K. firms over the period 1976-82, the authors report the existence of a positive, statistically significant and robust correlation between current period Growth rates and a natural measure of changes in current expectations about long run profitability, namely changes in the stock market valuation of the firm. Nevertheless, they find that variations in Corporate Growth rates are difficult to predict. Copyright 1997 by Blackwell Publishing Ltd
-
Learning and the sources of Corporate Growth
Industrial and Corporate Change, 2002Co-Authors: Paul Geroski, Mariana MazzucatoAbstract:This paper explores the link between learning and Corporate Growth by developing different models of learning and showing that they produce observably different models of Corporate Growth. Using data on the Growth of a number of firms in the US automobile industry during the 20th century, we compare these different models of Growth in an effort to identify the major sources of learning which these firms seem to have relied on. Although there are interesting differences between Growth processes before and after the Second World War, the basic conclusion that we are drawn to is that learning in this sector is largely unsystematic and opportunistic. Copyright 2002, Oxford University Press.
Jie Yang - One of the best experts on this subject based on the ideXlab platform.
-
Innovation capability and Corporate Growth: An empirical investigation in China
Journal of Engineering and Technology Management, 2012Co-Authors: Jie YangAbstract:This study examines the antecedents of firm innovation capability in high technology firms in China and its effect on long-term Corporate Growth. It explores the Growth-driven core competence of a firm by employing a knowledge-based view. The analysis of firm innovation capability indicates that firm innovation capability is related to long-term Corporate Growth. The results of this study support this link and the findings stress the importance of innovation intent and infrastructure to a firm's innovation capability.
-
The Process Competence of Knowledge Management and Corporate Growth
International Journal of Industrial Engineering-theory Applications and Practice, 2011Co-Authors: Jie YangAbstract:Drawing on the economic Growth and social cognitive theory, this paper investigates the effects of management strategies-based factors (knowledge management process competence and innovation capability) and dynamic capabilities-based factors (rewards system and marketing fit) on Corporate Growth in the Chinese high technology firms. The results show that the knowledge management process competence, innovation capability, and marketing fit exert significant effects on Corporate Growth. In particular, this study identifies a significant curvilinear relationship between innovation capability and Corporate Growth. The findings suggest that both management strategy-based and dynamic capabilities-based factors should be considered in achieving long term Corporate Growth in Chinese high technology firms. These results have important implications for researchers investigating the determinants of high technology firms’ Growth performance in transitional economies as well as practitioners seeking to improve Corporate Growth. This paper concludes with a discussion of the implications and limitations of the research.
-
The determinants of Corporate Growth: evidence from Chinese high technology firms
International Journal of Technology Management, 2011Co-Authors: Jie YangAbstract:Drawing on the economic Growth and social cognitive theory, this paper investigates the effects of management strategies-based factors (knowledge management process competence and innovation capability) and dynamic capabilities-based factors (rewards system and marketing fit) on Corporate Growth in the Chinese high technology firms. The results show that the knowledge management process competence, innovation capability, and marketing fit exert significant effects on Corporate Growth. In particular, this study identifies a significant curvilinear relationship between innovation capability and Corporate Growth. The findings suggest that both management strategy-based and dynamic capabilities-based factors should be considered in achieving long term Corporate Growth in Chinese high technology firms. These results have important implications for researchers investigating the determinants of high technology firms’ Growth performance in transitional economies as well as practitioners seeking to improve Corporate Growth. This paper concludes with a discussion of the implications and limitations of the research.
-
Antecedents and consequences of knowledge management strategy: the case of Chinese high technology firms
Production Planning & Control, 2008Co-Authors: Jie YangAbstract:Built on the knowledge management and Corporate Growth literatures, this paper examines the antecedents of knowledge management strategy (KMS) and its consequences. Grounded by a resource-based view and Corporate Growth theory, results reveal that a firm's knowledge management strategy and strategic performance relate to long-term Corporate Growth. Technological turbulence also relates to the firm's use of knowledge management strategy. Environmental turbulence and learning orientation do not exert significant effects on knowledge management strategy. Learning orientation has an interacting effect on long term Corporate Growth, while environmental and technological turbulences do not. Implications for knowledge management practitioners are discussed.
Mariana Mazzucato - One of the best experts on this subject based on the ideXlab platform.
-
Learning and the sources of Corporate Growth
Industrial and Corporate Change, 2002Co-Authors: Paul Geroski, Mariana MazzucatoAbstract:This paper explores the link between learning and Corporate Growth by developing different models of learning and showing that they produce observably different models of Corporate Growth. Using data on the Growth of a number of firms in the US automobile industry during the 20th century, we compare these different models of Growth in an effort to identify the major sources of learning which these firms seem to have relied on. Although there are interesting differences between Growth processes before and after the Second World War, the basic conclusion that we are drawn to is that learning in this sector is largely unsystematic and opportunistic. Copyright 2002, Oxford University Press.
