IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-28814-0_11.html
   My bibliography  Save this book chapter

Investment, Security Design and Information

In: Banking, Capital Markets and Corporate Governance

Author

Listed:
  • Gabrielle Demange
  • Guy Laroque

Abstract

We consider the decisions of a venture capitalist who starts a new project. The prospects for the resale values of the newly created firm(s) are important features of the choice of the project. We assume that they crucially depend on the state of information when the firms are offered on the stock market. Such information is likely to be asymmetric, which typically discourages the general public to invest in the new firms. This market imperfection influences the initial choices of the capitalist: it favours the projects where the asymmetry of information is the least pronounced (or, equivalently in our model, the risks born by the investor are smaller), and projects whose risk characteristics may be useful as a hedge to the market at large.

Suggested Citation

  • Gabrielle Demange & Guy Laroque, 2001. "Investment, Security Design and Information," Palgrave Macmillan Books, in: Hiroshi Osano & Toshiaki Tachibanaki (ed.), Banking, Capital Markets and Corporate Governance, chapter 11, pages 272-288, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-28814-0_11
    DOI: 10.1057/9780230288140_11
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-28814-0_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.