Browsing Working Papers (LEFIC) by Subject "kep"
Now showing items 1-11 of 11
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Cumming, Douglas J. (København, 2002)[More information][Less information]
Abstract: Contracts and exits from a sample of 179 investment rounds in 132 entrepreneurial firms by 17 European venture capital (VC) funds are analyzed. The data indicate the financial contracts are quite heterogeneous in terms of both the cash flow and control rights. The use of different securities by European VC funds does not depend on the definition of venture capital, and the securities used are not functional equivalents. A normative empirical analysis of exit shows the likelihood of different types of exit vehicles (IPO, acquisition, and liquidation) and the returns to venture capital depend on not only firm specific characteristics but also the allocation of cash flow and control rights. Keywords: Venture Capital, Financial Contracting, Exit, IPO, Acquisition JEL Classification: G24, G28, G31, G32, G35 URI: http://hdl.handle.net/10398/6825 Files in this item: 1
wplefic142002.pdf (672.0Kb) -
Vensel, Vello (København, 2004)[More information][Less information]
Abstract: In the 1990s, most of the Central and Eastern European countries (CEECs) went through radical liberalization and adopted large-scale economic and political reform programs. These programs included almost complete price, trade and capital movement liberalization, macroeconomic stabilization, currency reform, and small-scale and large-scale privatization. What is the role of the development of a legal and institutional infrastructure along with these radical changes in society and the economy? The first part of this paper is based on the results of an interview study of entrepreneurs and managers in Estonia undertaken in 1998 and in Estonia, Russia, Finland and Sweden in 2000 in order to obtain their view of the behavior of government agencies, lawmaking procedures and the operation of law enforcement mechanisms. The second part of this paper presents summary results from interview surveys of Estonian manufacturing firms undertaken from 1994-2000. The surveys were designed to quantitatively measure the state of and changes in the Estonian business environment, focusing on the key aspects of financial contractual relationships of Estonian manufacturing firms as well as regulation and dispute resolution mechanisms. Among the observations it is noted that government regulations do not seriously affect business decisions regarding the operation, expansion or closing down of Estonian manufacturing firms. A second observation is that the Estonian court system is perceived as inadequate for resolving a substantial number of disputes and conflicts among economic agents although legislation exists. Most firms rely on mechanisms of self-enforcement when possible. Journal of Economic Literature Classification numbers: K42, K49, G18, G30 Keywords: business environment, corporate financial relationships, enterprise restructuring, corruption, law making procedures, law enforcement. URI: http://hdl.handle.net/10398/6790 Files in this item: 1
wplefic042004.pdf (248.8Kb) -
Lando, Henrik (København, 2004)[More information][Less information]
Abstract: Does wrongful conviction lower deterrence and can this explain society’s aversion to sanctioning the innocent? This paper argues that for some of the most important categories of crime such as murder, assault or robbery, the answer to both questions is no. For these categories of crime, a potential offender need not fear wrongful conviction for any particular criminal act he or she chooses not to commit. For example, if a potential offender decides not to murder another person, he or she should not fear being wrongfully convicted of it, since the person will not be dead, and there will therefore be no investigation and no trial. He of she may risk being wrongfully convicted of another crime, but that risk exists independently of his or her own actions. It may be argued that wrongful conviction lowers deterrence in more indirect ways. First, the possibility of being sanctioned for a crime one does not commit may lower the threat of being sanctioned for a crime one commits, if two sanctions are not twice as threatening as one. Second, if wrongful conviction halts further investigations that may lead to the true offender, and third, if a potential offender thinks that if he or she does not take advantage of a crime opportunity, he or she may be wrongly convicted in the event that some other person grasps the same opportunity. However, it will be argued that wrongful conviction may also increase deterrence, and the three indirect effects are in any event unlikely to be quantitatively important in the real world. An implication of the present analysis is that society’s aversion to sanctioning the innocent cannot be rationalized by or reduced to a concern for deterrence. URI: http://hdl.handle.net/10398/6803 Files in this item: 1
wplefic092004rev2.pdf (163.7Kb) -
Wihlborg, Clas (København, 2004)[More information][Less information]
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Fosfuri, Andrea; Røende, Thomas (København, 2002)[More information][Less information]
Abstract: Abstract We analyze firms’ incentives to cluster in an industrial district to benefit from reciprocal technology spillovers. A simple model of cumulative innovation is presented where technology spillovers arise endogenously through labor mobility. It is shown that firms’ incentives to cluster are the strongest when the following three conditions are met: 1) technological progress is rapid; 2) competition in the product market is relatively soft; 3) the probability of a single firm to develop an innovation is neither very high nor very low. We show that some trade secret protection is always beneficial for firms’ profits and stimulates clustering. Excessive protection may impede technology spillovers and reduce firms’ incentives to cluster. JEL Codes: J3, K2, L1, O32, O34. Keywords: Cumulative innovation, industrial districts, intellectual property rights, technology spillovers. URI: http://hdl.handle.net/10398/6784 Files in this item: 1
wplefic132002.pdf (365.3Kb) -
Franke, Guenter; Peterson, Sandra; Stapleton, Richard C. (København, 2003)[More information][Less information]
Abstract: Investors choosing a portfolio strategy, in order to secure a pension at a future date for example, are faced with many uncertainties. One major uncertainty is the amount by which their pension fund will be supplemented by personal savings from a variety of sources such as life insurance contracts, bequests, or property sales. Over long periods of time these uncertainties are likely to be large and difficult to hedge, and hence may have a significant effect on the dynamic portfolio strategy. Drawing on the results of previous literature on the reaction of investors to non-unhedgeable background risk, and on the theory of stochastic dynamic programming, this article derives optimal strategies for investors maximising the expected utility of terminal wealth, where this wealth consists of the value of a pension fund plus accumulated personal savings. Numerical results, assuming that the market portfolio and the expectation of personal savings follow (possibly) correlated geometric Brownian motions, are derived to illustrate the effects of the size and uncertainty of the personal savings, as well as the effect of the resolution of the uncertainty in them over time. The computation uses a new technique for implementing the stochastic dynamic programming. This involves a binomial approximation, in two dimensions, which ensures that the computations are feasible for relatively long-term problems. URI: http://hdl.handle.net/10398/6795 Files in this item: 1
wplefic192003.pdf (540.9Kb) -
Lando, Henrik (København, 2004)[More information][Less information]
Abstract: This article compares a set of often used simple contracts or mechanisms in terms of how well they allocate decision rights between two agents over time. A basic assumption is that agents incur a fixed cost each time they renegotiate. The contracts or mechanisms studied are: individual ownership and authority, the first-come first-serve rule, the alternating rule and the sign-up rule. One trade-off that arises is the following: when usage of the asset is flexible in the sense that it does not matter in which period it occurs, agents may rely on obtaining the asset through arriving first at some point, while when an agent needs to time and plan the use of the asset, he or she may wish to hold stronger rights or to use the sign-up rule as a simple form of contracting. (JEL:D10, D23, L22); Keywords: Incomplete contracts, individual ownership,first-come first-serve rule, costly renegotiation. URI: http://hdl.handle.net/10398/6815 Files in this item: 1
wplefic012004.pdf (658.9Kb) -
Lando, Henrik (København, 2004)[More information][Less information]
Abstract: The paper argues that society should vary the sanction applied to a criminal defendant with the weight of the evidence against him or her. This is optimal when it is costly for society to apply sanctions, since it can yield the same degree of deterrence while requiring fewer resources to be spent on sanctioning. Furthermore, when the unfairness of convicting an innocent defendant increases with the size of the sanction, this provides a further rationale for graduating sanctions with the probability of guilt. Some objections are briefly discussed, mainly that it is inherently unfair to apply different sanctions on people, who have committed the same offense, and that the legal system will lose legitimacy if it allows sanctions to vary in the way suggested. URI: http://hdl.handle.net/10398/6820 Files in this item: 1
wplefic082004.pdf (289.7Kb) -
Motta, Massimo; Rønde, Thomas (København, 2002)[More information][Less information]
Abstract: We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces effort and profits under both spot and relational contracts. Having no CNC allows the researcher to leave for a rival. This alleviates a commitment problem by forcing the firm to reward a successful researcher. However, if the firm’s R&D investment mainly matters, including a CNC in the contract is optimal, as it ensures the firm’s incentives to invest. JEL Codes: J3, K2, L14, O31, O34. Keywords: Innovation, intellectual property rights, labor contracts, poaching, relational contracts, start-ups. URI: http://hdl.handle.net/10398/6800 Files in this item: 1
wplefic122002.pdf (481.6Kb) -
A comparative analysis of the explanatory power of accounting and patent information for the market values of German firmsRamb, Fred; Reitzig, Markus (København, 2004)[More information][Less information]
Abstract: We present a theoretical and empirical analysis of the fitness of national German (German Commercial Code – Handelsgesetzbuch (HGB)) and international (IAS and US-GAAP) accounting information, as well as European patent data to explain the market values of German manufacturing firms. For the chosen volatile period from 1997 to 2002, cautious national accounting information does not correlate with the firms’ residual market values (RMV). International accounting information makes no meaningful contribution to explaining firms’ RMV and seems to measure overinvestment only. Finally, patents counted at the individual country level correlate with the firms’ RMV. Keywords: Accounting standards, investor information, market value, patents JEL-classifications: D82, M40, M41, K11 URI: http://hdl.handle.net/10398/6814 Files in this item: 1
wplefic072004.pdf (390.9Kb) -
A Comparative International Analysis of Innovation Incentives from Patent Indemnification RulesReitzig, Markus; Henkel, Joachim; Heath, Christopher (København, 2002)[More information][Less information]
Abstract: Abstract: This paper contributes to the fundamental discussion of setting optimal liabilities in restitution law by analyzing the effects that the existing multitude of indemnification rules for patent infringements have on innovative and imitative activity. From a theoretical legal standpoint, the choice of patent law is particularly enlightening due to its hybrid public and private nature. From an economic perspective its relevance lies in regulating the driving forces of welfare in highly industrialized societies. Our analysis of regulations from six different jurisdictions (US, JP, DE, UK, FR, NL) reveals that from a scholarly standpoint none of the regulations sets optimal liabilities in general. Our major finding is that an expectation damage rule based on a renegotiation outcome from an ex-ante perspective (falling in between the generic legal notions of ‘lost profits’ and ‘infringer’s profits’) between licensor and licensee appears optimal in patent infringement cases to avoid dynamic inefficiencies. The result is intuitive, however, was not predicted by the existing literature on indemnification law. Keywords: Patents, litigation, damage awards, innovation, infringement JEL-Classifications: K41,L00, L20 URI: http://hdl.handle.net/10398/6827 Files in this item: 1
wplefic182002new.pdf (499.7Kb)
Now showing items 1-11 of 11