Publications

August 2013
Article

The Price of Diversifiable Risk in Venture Capital and Private Equity

By: Michael Ewens, Charles Jones and Matthew Rhodes-Kropf

This paper explores the private equity and venture capital (VC) markets and extends the standard principal-agent problem between the investors and venture capitalist to show how it alters the interaction between the venture capitalist and the entrepreneur. Since the... View Details

Keywords: Price; Risk and Uncertainty; Venture Capital; Private Equity; Contracts; Investment; Competition; Agency Theory; Investment Return; Forecasting and Prediction; Theory; Diversification

April 2010
Article

Performance Persistence in Entrepreneurship and Venture Capital

By: Paul A. Gompers, Josh Lerner, David Scharfstein and Anna Kovner

This paper presents evidence of performance persistence in entrepreneurship. We show that entrepreneurs with a track record of success are much more likely to succeed than first-time entrepreneurs and those who have previously failed. In particular, they exhibit... View Details

Keywords: Performance; Entrepreneurship; Venture Capital; Private Equity; Market Timing; Competency and Skills; Success; Business Startups

07 Jul 2020
Research & Ideas

Market Investors Pay More for Resilient Companies

The steep market drop in the early days of the COVID-19 crisis is being used as a laboratory to study the importance of companies investing in stakeholder relations with their employees, suppliers, and customers, and how those investments could be strategic resources... View Details

Keywords: by Kristen Senz; Financial Services

10 Nov 2009
Working Paper Summaries

Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930

Keywords: by André C. Martínez Fritscher & Aldo Musacchio

02 Aug 2010
Research & Ideas

Modern Indian Art: The Birth of a Market

Market categories—SUVs, smartphones, hip replacement surgeons—help facilitate commerce and other "market exchanges" by providing a basis for comparison and valuation. If I am hunting for a new SUV, for example, I can quickly... View Details

Keywords: by Sean Silverthorne

2008
Working Paper

Unravelling in Two-Sided Matching Markets and Similarity of Preferences

By: Hanna Halaburda

This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism... View Details

Keywords: Market Participation; Two-Sided Platforms; Marketplace Matching; Mathematical Methods

1970
Working Paper

A Dynamic General Equilibrium Model of the Asset Market and Its Application to the Pricing of the Capital Structure of the Firm

By: Robert C. Merton

10 Jul 2000
Research & Ideas

The State of the Markets

indices." Technology is a means to that end. Technology, Efficiency And An Aging Population From a macroeconomic perspective, Seifert pointed out, technologically advanced and efficient capital markets... View Details

Keywords: by James E. Aisner

2008
Working Paper

Positions of Power and Status: Reciprocity in the Venture Capital Industry

By: Mikolaj J. Piskorski

This paper proposes a straightforward way of differentiating between central network positions that confer power and those that confer status. I argue that actors achieve high status by receiving numerous exchanges from actors who in turn receive numerous exchanges... View Details

Keywords: Venture Capital; Partners and Partnerships; Power and Influence; Social and Collaborative Networks; Status and Position; Financial Services Industry; United States

August 2007 (Revised September 2008)
Case

Marketing the "$100 Laptop" (A)

By: John A. Quelch and Carin-Isabel Knoop

In 2002, Professor Nicholas Negroponte, a successful venture capitalist, author, and co-founder and chairman emeritus of the Massachusetts Institute of Technology (MIT) Media Lab, announced his intention to build a PC so cheap as to make it possible to provide... View Details

Keywords: Venture Capital; Internet and the Web; Information Technology; Product Development; Technological Innovation; Nonprofit Organizations; Marketing Strategy; Information Infrastructure; Developing Countries and Economies; Manufacturing Industry; Information Technology Industry; Computer Industry; Cambridge

Educators

Purchase

Article

Market Integration in Developed and Emerging Markets: Evidence from the CAPM

By: Robert Bruner, Wei Li, Mark Kritzman, Simon Myrgren and Sebastien Page

Beta, as measured by the Capital Asset Pricing Model (CAPM), is widely used for pricing stocks, determining the cost of capital, and gauging the extent to which markets are integrated. The CAPM model assumes that equilibrium conditions prevail. The choice of which... View Details

January 2005 (Revised October 2005)
Case

Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings

By: Rawi E. Abdelal and Christopher Bruner

Describes Standard & Poor's sovereign credit ratings business. Provides background on the history of credit ratings agencies, the meaning of credit ratings, the expansion of the sovereign ratings business over recent decades, and the market for credit ratings. Also,... View Details

Keywords: Sovereign Finance; History; Policy; Business and Government Relations; International Finance; Country; Globalized Economies and Regions; Decision Choices and Conditions; Capital Markets; Debates; Financial Services Industry; United States

Educators

Purchase

16 Feb 2004
Research & Ideas

Marketing Wine to the World

business to fund an aggressive expansion into the premium wine business. Cross-subsidization (beer to wine in this case) only makes sense if there are sizeable scope economies. Without them, cross-subsidization does not prove optimal, since the View Details

Keywords: by Manda Salls; Consumer Products; Entertainment & Recreation; Food & Beverage

2022
Chapter

The Origins of the Developmental State: The European Experience

By: Sophus A. Reinert

Book Abstract: There has been a major revival of interest in State Capitalism: what it is, where it is found, and why it is seemingly becoming more ubiquitous. As a concept, it has evolved from radical critiques of the Soviet Union, to being deployed by neo-liberals to... View Details

Keywords: State Capitalism; History; Macroeconomics; Developing Countries and Economies; Economic Systems; Europe

Purchase

Article

Unravelling in Two-Sided Matching Markets and Similarity of Preferences

This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism... View Details

Keywords: Welfare or Wellbeing; Body of Literature; Market Platforms

August 2020
Article

Financial Market Risk Perceptions and the Macroeconomy

By: Carolin E. Pflueger, Emil Siriwardane and Adi Sunderam

We propose a novel measure of risk perceptions: the price of volatile stocks (PVS), defined as the book-to-market ratio of low-volatility stocks minus the book-to-market ratio of high-volatility stocks. PVS is high when perceived risk directly measured from surveys and... View Details

Keywords: Risk-centric Business Cycles; Cross-section Of Equities; Real Risk-free Rate; Real Investment; Financial Markets; Risk and Uncertainty; Perception; Investment

2007
Other Unpublished Work

Positions of Power and Status: Reciprocity in the Venture Capital Industry

By: Mikolaj Jan Piskorski

This paper proposes a straightforward way of differentiating between central network positions that confer power from those that confer status. I argue that actors achieve high status by receiving numerous exchanges from actors who receive numerous exchanges from... View Details

Keywords: Venture Capital; Power and Influence; Opportunities; Status and Position

2009
Chapter

The Principles of Embedded Liberalism: Social Legitimacy and Global Capitalism

By: Rawi Abdelal and John G. Ruggie

In this essay we revisit the principles of “embedded liberalism” and argue for their relevance to the contemporary global economy. The most essential principle is the need for markets to enjoy social legitimacy, because their political sustainability ultimately depends... View Details

Keywords: Economic Systems; Ethics; International Finance; Globalization; Multinational Firms and Management; Corporate Governance; Governing Rules, Regulations, and Reforms; Labor