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Entrepreneurial manipulation with staged financing

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  • Yung, Chris

Abstract

Finance is staged in entrepreneurial settings. It has been argued that staging has a drawback: entrepreneurs manipulate short-term appearances to keep funds flowing. In contrast, this paper finds that staging can lead to either more or less manipulation than non-staged finance. Finally, behavior in early rounds induces a kind of “manipulation persistence” so that total manipulation is path-dependent. The model makes predictions regarding crowdsourced finance, switching of VCs, and lifecycle issues in entrepreneurial finance.

Suggested Citation

  • Yung, Chris, 2019. "Entrepreneurial manipulation with staged financing," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 273-282.
    • Handle: RePEc:eee:jbfina:v:100:y:2019:i:c:p:273-282
    DOI: 10.1016/j.jbankfin.2018.06.016
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    Cited by:

    1. Cumming, Douglas & Deloof, Marc & Manigart, Sophie & Wright, Mike, 2019. "New directions in entrepreneurial finance," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 252-260.
    2. Song, Tianyi & Kutsuna, Kenji, 2023. "Venture capital investment and institutional factors: Evidence from China," Research in International Business and Finance, Elsevier, vol. 65(C).
    3. Daniel Blaseg & Douglas Cumming & Michael Koetter, 2021. "Equity Crowdfunding: High-Quality or Low-Quality Entrepreneurs?," Entrepreneurship Theory and Practice, , vol. 45(3), pages 505-530, May.
    4. Douglas Cumming & Satish Kumar & Weng Marc Lim & Nitesh Pandey, 2023. "Mapping the venture capital and private equity research: a bibliometric review and future research agenda," Small Business Economics, Springer, vol. 61(1), pages 173-221, June.
    5. Xu, Li & Zhang, Qin & Wang, Keying & Shi, Xunpeng, 2020. "Subsidies, loans, and companies' performance: evidence from China's photovoltaic industry," Applied Energy, Elsevier, vol. 260(C).
    6. David J. Scheaf & Matthew S. Wood, 2022. "Entrepreneurial Fraud: A Multidisciplinary Review and Synthesized Framework," Entrepreneurship Theory and Practice, , vol. 46(3), pages 607-642, May.
    7. Mella-Barral, Pierre, 2020. "Strategic decertification in venture capital," Journal of Corporate Finance, Elsevier, vol. 65(C).
    8. Cumming, Douglas J. & Johan, Sofia A. & Zhang, Yelin, 2019. "The role of due diligence in crowdfunding platforms," Journal of Banking & Finance, Elsevier, vol. 108(C).

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