In today's venture capital market, starting a technology-based company is—to say the least—challenging. After exerting the efforts necessary to develop a compelling business plan, secure necessary intellectual property rights and build the beginnings of a management team, it might seem like the offer of investment from a venture capital firm is the deserved icing on the cake. But there's still ...

This paper provides a theory that explains the sizeable excess return to venture equity, and ties it to the high VC discount rates, i.e., to VC impatience. The theory is based on the shortage of venture capitalists (VCs) — people who have the expertise to assess the profitability of projects, and have liquidity to finance them. A VC must supply not only money but also his time, and it is the sc...

Prediction of the performance of international joint ventures remains a relatively underresearched area, yet its importance is well recognized due to the tremendous surge in joint venture activities in the past decade. Data on 1,463 Sino–Hong Kong joint ventures were gathered and those that appeared on the Honor Roll of the China Association of Enterprises with Foreign Investment are identified...

We examine the impact of abatement taxes on the pollution level in a duopoly framework with endogenous market structure. We demonstrate that an increase in abatement taxes could trigger a regime-switch from joint ventures to Cournot competition, causing the pollution level to increase. Moreover, abatement taxes can implement the first best outcome if and only if the industry is not too pollutin...

Joint ventures afford unique opportunities to study how firms assert property rights over jointly used assets because parents clearly delineate control. We argue that ownership allocations trade off investment incentives with control-related inefficiencies. We show how residual control rights can create a discontinuity in parent incentives that explains the observed clustering of ownership at 5...