Preplanned exit strategies in venture capital

This paper empirically considers the role of preplanned exits (the investor's initial strategy to sell the investee firm via an acquisition or an initial public offering (IPO) at the time of initial contract with the entrepreneur), legal conditions and investor versus investee bargaining power in the allocation of cash flow and control rights in entrepreneurial finance. We introduce a sample of 223 entrepreneurial investee firms financed by 35 venture capital funds in 11 continental European countries, and these data indicate the following. First, preplanned acquisition exits are associated with stronger investor veto and control rights, a greater probability that convertible securities will be used, and a lower probability that common equity will be used; the converse is observed for preplanned IPOs. Second, investors take fewer control and veto rights and use common equity in countries of German legal origin, relative to Socialist, Scandinavian, and French legal origin. Third, more experienced entrepreneurs are more likely to get financed with common equity and less likely to be financed with convertible preferred equity, while more experienced investors are more likely to use convertible preferred equity and less likely to use common equity.     

Restrictions on Competition in Municipal Competitive Procurement in Sweden

The bidding process in public procurement in Sweden is a first-price sealed bid auction. Although there is a competitive effect on the bids in this type of auction, the contracting entity can, through the choice of procurement procedure, restrict the number of bidders. This paper studies this choice and imposes an implementation cost on the contracting entity to motivate such a restriction. The results, based on data for Swedish municipalities, suggest that contract specifications and municipality characteristics (that are assumed to influence the implementation cost) affect the volume of the procurement and the number of bidders but not necessarily the choice of procurement procedure.Special thanks to Karl-Gustaf Löfgren and Xavier de Luna for valuable comments and suggestions on this paper. Financial support from The Swedish Competition Authority and the Swedish Council for Research in Humanities and Social Sciences (HSFR) is gratefully acknowledged.     

Institutional Investment in Listed Private Equity

This paper examines institutional investors’ propensity to invest in a relatively unknown asset class of listed private equity. Based on data provided by LPEQ, Preqin and Scorpio Partnership covering 171 institutional investors in Europe in 2008–2010, we find allocations are primarily a function of size, type, location, decision‐making authority and liquidity preferences. Investment in listed private equity is more commonly made by institutions that are smaller, private (not public) pension institutions, institutions that have a preference for liquidity, quick access, and administrative and cash flow management simplicity, and institutions that are based in the UK, Switzerland, Sweden and the Netherlands. As well, institutions are less likely to invest in listed private equity when investment decision‐making is empowered to an alternative asset class team.     

THE OUTPUT OF THE SWEDISH EDUCATION SECTOR

The output of the Swedish education sector is defined as the addition to lifetime incomes generated by the schooling system. Using cross-sectional information on wages, employment rates, working hours, school-participation and leisure time, all by years of schooling, we compute new output-based measures of the education sector. Measures that include and exclude leisure, and that are counted before and after taxes are computed for the years 1967, 1973, 1980 and 1990. Our most important conclusion is that the output-based measure differs so markedly from conventional input-based ones that a replacement of the latter with the former would change the picture of the overall performance of the Swedish economy over the period.     

Watching narratives of travel-as-transformation in The Beach and The Motorcycle Diaries

The attention recently accorded to feature films in tourism studies has been mostly driven by the idea that cinema has the ability to provoke in the viewer a sense of anticipation regarding a given or potential tourist destination. Films, however, also play an important role in shaping our notions of what a tourist experience should be. One of the most common tropes in travel or tourism-related films has been the trope of the journey as a transformative or ‘life-changing experience’. This paper explores the connections between this recurrent trope and the classical narrative film. Broadly consisting of a character-centred narrative in which events are organised by causal logic, moving towards the resolution of an initial problem or crisis, the classical narrative film relies heavily upon the idea of change (the turning point which prepares the way for denouement) and is, therefore, particularly prone to depictions of tourism as a life-changing experience. Despite innovations introduced from the 1960s onwards, most mainstream travel films still follow this narrative scheme. This paper analyses two of these films, The Beach (2000, dir. Danny Boyle) and The Motorcycle Diaries (2004, dir. Walter Salles), which have been widely discussed in relation to tourism, underlining how they support notions of travelling as a source of transformation, sidestepping more banal kinds of experiences. Drawing on a large sample of online film reviews, I argue that viewers are not unaware of this bias, which they often reproduce, comment upon and challenge.     

Optimal fiscal policy in a small open economy with limited commitment

We introduce limited commitment into a standard optimal fiscal policy model in small open economies. We consider the problem of a benevolent government that signs a risk-sharing contract with the rest of the world, and that has to choose optimally distortionary taxes on labor income, domestic debt and international transfers. Both the home country and the rest of the world may have limited commitment, which means that they can leave the contract if they find it convenient. The contract is designed so that, at any point in time, neither party has incentives to exit. We define a small open emerging economy as an economy where the limited commitment problem is active in equilibrium. Conversely, a small open developed economy is an economy in which the commitment problem is not active. Our model is able to rationalize some stylized facts about fiscal policy in emerging economies: i) the volatility of tax revenues over GDP is higher in emerging economies than in developed ones; ii) fiscal policy is procyclical in emerging economies; iii) emerging economies may “graduate” from procyclical fiscal policy and adopt countercyclical policies in the long run.     

Panel data modeling of bank deposits

Annals of Finance - Studying the dynamics of deposits is important for three reasons: first, it serves as an important component of liquidity stress testing; second, it is crucial to...     

Agritourism networks: empirical evidence from two case studies in Greece

This study investigates the characteristics of informal agritourism-related networks within destinations with the help of social network analysis by measuring macro and meso structural aspects of networks in two tourist destinations in Greece with different geographic characteristics: an island-Lesvos (in North Eastern Aegean) and a continental locality-Plastiras Lake (central part of Greece). The main objective is to illustrate and discuss quantitative and qualitative aspects of these networks with selected actors who are linked (directly or indirectly) with the agritourism sector through personal in-depth and semi-structured interviews. The quantitative aspects include: quantity of links, spatial extent of networks, type of relationship, its “thickness”, the duration of the relationship, issues of seasonality as well as satisfaction of the cooperation. The qualitative aspects include the type of relationship of the actors over the link and who (if anyone) has “control” over this relationship. The main findings indicate that the examined networks are partially affected by the geographic characteristics of the case studies and they are very similar in terms of absolute numbers and network metrics. Although research on networks has been an emerging and promising approach, qualitative characteristics of informal networks seem to be integral for understanding networks and planning tourism policies.     

The flow-performance relationship around the world

We use a new dataset to study how mutual fund flows depend on past performance across 28 countries. We show that there are marked differences in the flow-performance relationship across countries, suggesting that US findings concerning its shape do not apply universally. We find that mutual fund investors sell losers more and buy winners less in more developed countries. This is because investors in more developed countries are more sophisticated and face lower costs of participating in the mutual fund industry. Higher country-level convexity is positively associated with higher levels of risk taking by fund managers.     

Market Orientation in Public Service—A Comparison Between Buyers and Providers

Public services have been subjected to processes of deregulation, competition, and privatization in many countries worldwide. One popular reform has involved focusing on competitive procurement. This context, where public and private organizations jointly deliver the service in a dyad, makes the market orientation of public services highly complex. The main elements of market orientation – intelligence generation, intelligence dissemination and responsiveness– have shown themselves to be valid and of significance in both the private and public sectors. Nevertheless, the empirical context of the public sector involves a complexity that has been poorly addressed in market orientation research. In this study, we research the Swedish public transport industry and survey buyer and provider organizations in order to determine how market-orientated activities are approached in public-private service dyads. We present three theoretically-underpinned relationship types - buyer dominated, provider dominated and collaborative - which we suggest as having implications for market-oriented activities. A survey of public transport authorities’ (buyers, n = 48) and operators’ (providers, n = 49) market orientation activities reveals the concurrent prevalence of characteristics from all three relationship types, as both parties try to dominate the relationship while also engaging in collaborative efforts. Drawing on our theoretical framework and our empirical results, we conclude that there are legitimate differences in the perspectives of buyers and providers, and that these differences, if acknowledged and properly managed, can provide valuable resources in the development of a joint market orientation in complex public-private settings.