Research on what determines the performance of start-up companies is characterized by a sharp debate in the literature of economic sociology and the sociology of the economy. There is one extreme view proposing that in the long run, a rational market takes care of allocating scarce resources such as venture capital funding to the most potentially profitable and exciting business plans. By contr...

This paper presents a new way of measuring residual income, originally introduced by Magni (2000a,b,c, 2001a,b, 2003). Contrary to the standard residual income, the capital charge is equal to the capital lost by investors. The lost capital may be viewed as (a) the foregone capital, (b) the capital implicitly infused into the business, (c) the outstanding capital of a shadow project, (d) the cla...

Access to equity capital is critical for the growth of businesses, especially for young companies, which lack the cash flows necessary to repay loans. To meet this need, a thriving venture capital industry has evolved, fostering job creation, economic growth, and innovation in the United States. Not all companies, however, have been equally able to access such investments. Firms owned by women ...

This paper examines empirically the relationship between the relative price of capital and the rate of economic growth. In the results. machinery appears to bc the most important component of capital: when the relative price of machinery and the relative price of nonmachinery are included in a Barro ( 199 1) growth regression, a strong negative relationship between growth and the machinery pric...

This paper investigates the so called liability management exercises by European banks, which bear comparable effects to triggering contingent capital. I first explore the determinants of these exercises. I then study market reactions to these operations, and banks’ economic performance following them. Debtors positively receive these exercises, while stockholders discriminate according to the ...

A model of the economic effects of civil war and the post-war period is developed. A key feature is the adjustment of the capital stock through capital flight. Post-war this flight can either be reversed or continue, depending partly upon how far the capital stock has adjusted to the war. The model is tested on data for all civil wars since 1960. After long civil wars the economy recovers rapid...

This paper examines the implications of human capital risk for the relationship between inequality and economic development. It argues that due to missing insurance markets for human capital risk, the initial distribution of family wealth may play an important role for an economy’s process of development fueled by human capital accumulation. The analysis suggests that, in the absence of credit ...

Nowadays, Foreign Capital Inflows (FCIs) are considered as a catalyst for economic development and an important source of transferring technology and foreign exchange earnings from developed to developing countries. The purpose of this paper is to estimate the impact of FCIs (which include foreign direct investment, personal remittances and official development investment) on economic growth in...