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We examined the relationship between employee equity compensation, incentive compensation, and firm growth using a sample of 480 privately held firms from the Ewing Marion Kauffman Foundation’s database of Ernst & Young Entrepreneur Of The Year (EOY) winners. Using frameworks from agency and motivation theories, we argued that larger percentages of both equity- and incentivebased compensation allocated to top managers and employees would be associated with firm growth. After controlling for firm and industry effects, the results of the study showed that while the firms in the sample preferred providing incentive compensation, providing equity compensation for employees was a positively significant predictor of firm growth over a three-year period. These findings suggest that prescriptions for growth in larger firms developed from agency theory also may be applicable to entrepreneurial firms, and founder/CEOs seeking to grow their firms should consider using equity compensation to motivate their current employees and to attract new ones.

This study tests the “Resource Balance Proposition” that is developed from the Resource-Based View (RBV) of strategy. While recent research using RBV to study new ventures has focused primarily on the identification and acquisition of resources (Alvarez & Busenitz, 2001; Lichtenstein & Brush, 2001), this investigation examines the deployment of given resources in the pursuit of growth. It argues that the effective management of the resource base is at least as important to long-term survival as securing that base in the first place. Further, it assumes that firm growth is a desirable goal (especially for young firms) but posits that growth is not without cost and highly accelerated growth is particularly costly. Therefore, the hypotheses presented in this paper propose that there is a growth trajectory that optimizes profits and net worth by striking a balance between the resource deployments necessary to fuel growth and those needed to meet current obligations. The findings from this study confirm that both too little and too much growth have detrimental effects on firm vitality. More specifically, the data show a curvilinear relationship between the absolute rate of firm growth and the levels of both profits and net worth. This finding provides significant support for the Resource Balance Proposition, which states that the allocation of firm resources must be properly balanced between current resource positions and future resource positions to maximize wealth creation.

The following list of titles was compiled by the Library Journal List Committee of the Reference and Adult Services Division, American Library Association. Committee members include Larry Earl Bone, Memphis Public Library and Information Center, Chairman; Lynn Cochran, Free Library of Philadelphia, Pennsylvania; Carl T. Cox, University of Tennessee, Knoxville; Laurel Grotzinger, Western Michigan University, Kalamazoo; John Larsen, Columbia University, New York, New York; Wilbur McGill, Enoch Pratt Free Library, Baltimore, Maryland; Mary Jean Nottviet, Iowa City, Iowa; Lelia B. Saunders, Arlington County Department of Libraries, Virginia; Paul Spence, University of Alabama in Birmingham. The 63 titles on this list represent in the opinion of the Committee, a selection of outstanding reference books published in 1973 and late 1972 for small and medium‐sized public and college libraries.

The advent of derivatives and structured products has coincided with a proliferation of fixed income models used to analyze hedging, pricing, forecasting, and estimation for the term structure of interest rates. This article evaluates five models Ho‐Lee (HL); Black‐Derman‐Toy (BDT); Vasicek; Cox‐Ingersoll‐Ross (CIR); and Heath‐Jarrow‐Morton (HJM) (see Exhibit 1) that are currently used by structured finance practitioners. We suggest which models are most appropriate for assets with different time horizons, interest rate sensitivities and cashflow properties. The authors link model selection to structured financial instruments with the singular focus on the trade‐off between model precision/complexity and calculation costs.