Arbeitspapier
Financial contracts and contingent control rights
According to empirical studies of venture capital finance, the division of control rights between entrepreneur and venture capitalists is often contingent on certain measures of firm performance.If the indicator of the company's performance (eg earnings before taxes and interest) is low, the venture capital firm obtains full control of the company.If company performance improves, the entrepreneur retains or obtains more control rights. If company performance is very good, the venture capitalist relinquishes most of his control rights.In this article, we extend the incomplete contracting model of Aghion and Bolton to construct a theoretical model that is consistent with these empirical findings.
- ISBN
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952-462-061-8
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Finland Discussion Papers ; No. 14/2003
- Classification
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Wirtschaft
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- Subject
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incomplete contracts
financial contracting
contingent contracts
control rights
joint ownership
- Event
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Geistige Schöpfung
- (who)
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Vauhkonen, Jukka
- Event
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Veröffentlichung
- (who)
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Bank of Finland
- (where)
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Helsinki
- (when)
-
2003
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Vauhkonen, Jukka
- Bank of Finland
Time of origin
- 2003
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