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Exit strategies are critical for external private equity holders, such as venture capitalists and business angels, to receive investment returns successfully. The paper models the exit decision as a fixed date with the option to exit early, and develop an approach to help private equity holders determine an optimal early exit region based on a target equity value and the time remaining.

The paper sets up a continuous time model to derive analytical solutions and apply simulations to numerical examples in this study.

By numerically analyzing the nature of the solution the paper illustrates that a higher return drift of the investee company, a lower return volatility of the investee company, and a higher target return of the private equity holder results a smaller early exit region.

This study helps determine the optimal time of stopping investments, and provides venture capitalists with a usable way to make exit decisions.

The purpose of this paper is to study factors that affect the success of technology parks in terms of fostering entrepreneurial firm formation, growth, and financing.

Based on a new international dataset of technology parks (tech parks) from 13 countries (eight developing countries and five developed countries), the paper relates the success of technology transfer to the legal environment within which the tech park operates, as well as the characteristics of the tenants in the tech park and the services provided by the tech park.

The data indicate entrepreneurial success is more likely to be facilitated when there is better legal protection offered to companies in the jurisdiction within which the tech park is located, when there is a greater presence of foreign university- and government-affiliated companies in tech parks, and a smaller presence of foreign private companies in tech parks, particularly foreign subsidiaries. The data further indicate entrepreneurial success is more likely when tech park tenants have greater testing/analysis focus, and when tenants have less assembly- and service-focussed activities. Also, entrepreneurial success is more likely to be facilitated by tech parks with on- and off-site technology licensing offices that promote trade shows, provide access to funds for commercialization and distribute information on the R&D outcomes of tech park tenants.

The data offer insights into efficient design of tech parks. Coarse measures from survey data are limitations yet offer scope for further examination in future research.

The paper provides guidance for entrepreneurs and their investors in terms of ways maximize value in terms of entrepreneurial growth and financing from selecting appropriate tech parks.

The purpose of this paper is to investigate how foreign and domestic investors differ in their beliefs about the relative merits of a firm's political connections.

These differences are employed to explain cross-sectional variation in the previously documented premium in A-share prices relative to otherwise equivalent foreign currency denominated B-shares for Chinese firms.

Chinese domestic individual investors were excluded from owning B-shares of Chinese firms prior to February 20, 2001. The authors find that firms with more political connections have higher premiums and a smaller reduction in premiums associated with this event.

This is consistent with domestic block holders deriving additional benefits from politically connected firms.

The findings also have important policy implications by showing that government can have a strong effect on the economy even without applying macro-policy tools.

Government ownership in listed companies can result in discrepancies among classes of investors with respect to their valuations. Furthermore, the prohibition of short sales prevents arbitrage from correcting this bias, and eventually the role of the market in allocating resources efficiently is undermined.

The authors investigate the role of political connections as implied by the proportion of state ownership in explaining the A-share premium. Unlike previous studies that associate state ownership with political risk, the paper relates state ownership to political connections that are particularly beneficial to domestic large block shareholders. This interpretation is consistent with the findings and with previous literature on state ownership and political connections of Chinese firms.

The purpose of this paper is to examine the relationship between IPO lockups and founder-CEOs’ compensation and incentives in newly public firms. The paper argues that existence and length of lockup agreements are affected by bargaining power of founders, which will consequently influence the determination of their compensation contracts.

Multivariate tests are constructed to examine the relationship between IPO lockups and executive compensation. OLS, fixed-effect panel data model, and the Heckman two-stage model are all utilized to conduct the tests.

The study finds that lockup existence and lockup length are negatively related to founder-CEOs’ total compensation and positively related to founder-CEOs’ equity incentives. The results hold after controlling for the endogenous decision to sign a lockup agreement at the IPO.

The paper's results suggest that the power of founders and other insiders is a crucial factor in the lockup determination process besides economic factors identified in previous studies. The paper's results also echo the political power theory in the management literature which suggests that an organization's decision making is heavily influenced by relative power of organizational members and reflects their preference.

The paper raises a new explanation for the determinant of IPO lockups that supplements the extant theories. The paper argues that existence and length of lockup agreements could be affected by bargaining power of insiders.

The purpose of this paper is to observe listed firms in China during the 2008 financial crisis and investigates how group affiliation affects firm value when the economy turns down. The paper focusses the study on answering the following questions: during the crisis, do affiliated firms have higher or lower stock returns than independent firms? Does corporate governance relate to the value of group firms? How does group affiliation influence firm value? Does performance of affiliated entrepreneurial firms differ from affiliated state-owned enterprises (SOEs)?

The paper uses non-parametric tests and regression analysis on a sample of 1,469 Chinese listed companies to investigate the research questions.

Affiliated firms have lower stock returns than independent firms by 1.91 percent during September to December of 2008. This poor performance is even worse for firms seriously shocked by the crisis. Good corporate governance can mitigate the negative effects of group affiliation on firm value. The lower valuation of affiliated firms lies in the fact that controlling shareholders undertake more related party transactions at the expense of minority shareholders. Finally, although business groups can provide internal financing for entrepreneurial firms in China, affiliated entrepreneurial firms experience a larger value decrease than affiliated SOEs due to the conflict interest between controlling and minority shareholders.

This research provides unique evidence about the performance of group-affiliated firms during the 2008 financial crisis and documents the mechanisms through which group affiliation influences firm value.

The Gulf Cooperation Council (GCC) member countries have recently given tremendous emphasis to corporate entrepreneurship. The purpose of this paper is to investigate whether the lack of entrepreneurship in publicly listed GCC firms affects their ability to acquire debt financing.

Using stochastic frontier approach, the paper estimates an optimal revenue function given labor costs, operating expenses, and existing physical infrastructure of an organization. The paper estimates the difference between the optimal and actual level of firm revenues from a revenue frontier function, which can be partially resulted from managerial inefficiency due to the lack of corporate entrepreneurship. The paper uses fixed-effect panel regression and simultaneous equations system to determine the effect of such inefficiency on firms’ debt financing.

The main finding is that as entrepreneurial activities increase, firms’ ability to borrow from banks also increases. Results also indicate that increased borrowing improves internal governance practices and indirectly compel the management to become more efficient.

Results exhibit how improving entrepreneurship affects firms’ access to external financing when the financial markets are underdeveloped and are plagued with information asymmetry and agency problems.

The paper provides insights for policy makers in the GCC and other emerging countries where entrepreneurial activities are becoming a priority.

The paper develops a new proxy measure of entrepreneurship in public firms and advances our knowledge about the importance of entrepreneurship in finance.