Staging of Venture Financing, Investor Opportunism and Patent Law

Abstract:  Stage financing provides a real option that is valuable when facing external uncertainty. However, it may also induce investor hold-up, if the property rights on an invention are not sufficiently protected. As a consequence, the entrepreneur may not work hard. Investor opportunism is less likely to occur, if investors' residual cash-flow-rights are contingent on verifiable 'milestones' in the previous stage. Equity-linked financing also provides high-powered incentives to the investor not to 'steal the idea' because his payoff becomes sensitive to the project value. The paper provides a new explanation for both types of contractual provisions.     

The Seven Faces of Singaporeans: A Typology of Singapore Consumers and Their Aspirations and Life Satisfaction

A large-scale representative survey was conducted to examine lifestyle patterns of Singaporeans. The data were analyzed using a three-step approach. First, the underlying dimensions of Singaporeans' value system were identified using factor analysis. Based on 45 lifestyle and value items, six factors were obtained. The analysis suggests that the value system of Singaporeans can be described using the following six factors: (1) family values, (2) entrepreneurial spirit, (3) status, (4) traditional values, (5) materialism, and (6) society orientation. Second, these six factors were then utilized to identify clusters of Singaporeans with similar value profiles. The cluster analysis identified the following seven major groups of Singaporeans: (1) Traditional Family Oriented, (2) New Age Family Oriented, (3) Entrepreneurs, (4) Aspirers, (5) Materialists, (6) Pragmatists, and (7) Independents. Finally, to examine whether the identified value-based clusters could also be differentiated in terms of key demographic variables, a discriminant analysis was conducted. The results showed that the seven clusters had distinctive patterns along demographic variables. The examination of the aspirations and life satisfaction of the clusters showed that significant differences did exist among themselves. These differences in aspirations and life satisfaction were consistent with the traits and attitudes of the respective clusters and provided ample support to the grouping of the clusters.     

Are there free rides out of a recession? The case of Switzerland

During the 2008/2009 recession, most countries resorted to discretionary fiscal policy measures. In this paper, we run two simulations with the KOF Swiss Economic Institute’s macroeconomic model to assess how both the Swiss stimulus measures, and the measures taken by Switzerland’s major trading partners, have affected the Swiss economy. The KOF baseline estimate incorporates fiscal stimulus packages in Switzerland and abroad. We re-run the model, modifying the exogenous variables to represent situations in which no fiscal action was taken (a) in Switzerland and (b) elsewhere. We find that the spillover from the foreign efforts to curb the recession dwarfs the effect of the domestic stimulus packages. In addition to making its own (rather limited) efforts to fight the recession, Switzerland also took a long free-ride that far exceeded the short one it paid for.