Staged investments in entrepreneurial financing

Venture capitalists deliver investments to entrepreneurs in stages. This paper shows staged financing is efficient. Staging lets investors abandon ventures with low early returns, and thus sorts good projects from bad. The primary implication from staging is that it is efficient to invest more in later rounds. The model yields a number of predictions on how the ratio of early to late round financing varies with uncertainty, the outside options of both parties, the value of the venture, the costs of investment, and project difficulty. We test these predictions against data on venture capital financings and find significant empirical support for the theory.     

Are some Indian banks too large? An examination of size efficiency in Indian banking

In this paper we use data from the years 1997–2003 to evaluate the size efficiency, as distinct from scale efficiency, of Indian banks. Following Maindiratta [Maindiratta A (1990) J Econ 46:39–56] we consider a bank to be “too large” if breaking it up into a number of smaller units would result in a larger output bundle than what could be produced from the same input by a single bank. When this is the case, the bank is not size efficient. Our analysis shows that many of the banks are, indeed, too large in various years. We also find that often a bank is operating in the region of diminishing returns to scale but is not a candidate for break up.

Injury count model for quantification of risk of occupational injury

Reduction of risk of occupational injuries is one of the most challenging problems faced by industry. Assessing and comparing risks involved in different jobs is one of the important steps towards reducing injury risk. In this study, a comprehensive scheme is given for assessing and comparing injury risks with the development of injury count model, injury risk model and derived statistics. The hazards present in a work system and the nature of the job carried out by workers are perceived as important drivers of injury potential of a work system. A loglinear model is used to quantify injury counts and the event-tree approach with joint, marginal and conditional probabilities is used to quantify injury risk. A case study was carried out in an underground coal mine. Finally a number of indices are proposed for the case study mine to capture risk of injury in different jobs. The findings of this study will help in designing injury intervention strategies for the mine studied. The job-wise risk profiles will be used to prioritise the jobs for redesign. The absolute indices can be applied for benchmarking job-wise risks and the relative indices can be used for comparing job-wise risks across work systems.     

The Impact of the Introduction of an Expert System on a Public Accounting Organization

Little research has addressed the effects of the introduction of an expert system on an organization. This study uses an embedded, multiple case study design to investigate the changes that occurred in the technology, structure, and culture of a public accounting organization when an expert system was introduced. The system of interest was Coopers & Lybrand's ExperTAX and three Coopers & Lybrand field offices served as case sites. Evidence was gathered from two departments (audit and tax) and three levels (staff, manager, and partner) at each site. The major source of evidence was personal interviews with Coopers & Lybrand personnel. Analysis of the evidence included a comparison of each site pre- and post-system introduction and comparisons of the impacts across sites. The analysis of the evidence indicated that changes related to the introduction of ExperTAX did occur. However, the majority of the changes were associated not only with the design features of the system but also with the scope of the system and the guidelines issued for its use.     

Product innovation for the people's car in an emerging economy

As product offerings of multinational enterprises (MNEs) continue to primarily serve the relatively well-to-do consumers in emerging economies, innovations to meet the unique affordability and acceptability criteria of masses at the base of the pyramid (BoP) continues to remain a daunting challenge. The academic literature is sparse on comprehensive in-depth studies about the intricate processes involved in shaping and managing technology development for the masses. Focusing on product innovation by Tata Motors of India with the Nano—the world's cheapest car, our case study aims to understand how the innovator's choices regarding the use of technology, product design and organizational practices for new product development enabled it to meet the challenge of innovation for India's masses. Drawing on Christensen's work on disruptive innovations, our analysis shows how frugal use of resources through a new combination of existing component technologies created a new modular product to achieve the unique price–performance requirements demanded by the BoP. Our findings show that collaboration with suppliers for component design and their early integration in the design phase substantially lowered costs and helped eliminate unnecessary frills whilst incorporating features valued by mass markets. Our study has important managerial implications for MNEs and provides critical insights into the processes for a new blueprint for an untapped market segment in the automobile industry.     

Welfare Effect of Mergers and Multilateral Trade Liberalization

In a two‐country model where firms behave à la Cournot, we show that trade liberalization increases (decreases) the social desirability of those mergers that generate sufficiently large (small) reductions in marginal cost. There exists a range of intermediate levels of marginal cost savings such that marginal tariff reductions increase (decrease) the desirability of merger at sufficiently low (high) tariff levels. Moreover, in the neighborhood of free trade, we show that if trade liberalization increases the profitability of a merger, it necessarily also increases its desirability.