{"title":"Venture Capital Funding in the Middle of the Year 2011: Are We Back to Pre-Crisis Boom Levels?","authors":"J. Block, Philipp G. Sandner","doi":"10.1002/JSC.893","DOIUrl":"https://doi.org/10.1002/JSC.893","url":null,"abstract":"The 2009 financial crisis had a severe impact on the venture capital market. This brief article summarizes the empirical evidence as regards the effect of the financial crisis on venture capital financing. Further, the article analyzes, whether now, in the middle of 2011, the venture capital market is back to its pre-crisis boom levels. Using large-scale data from the US Internet industry, we find that the number of funding rounds and the average amount of funds raised are back to pre-crisis boom levels and the next phase of investor irrational exuberance may have already started. Another finding concerns the variation in the funds raised per funding round. It seems that the financial crisis has favored the development of “winner-take-all” markets in the US Internet industry. Those ventures that have survived the financial crisis such as Twitter or Facebook are now collecting even larger sums of money than they probably would have collected if the financial crisis would not have occurred.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131481337","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Lessons We Should Have Learned from the Global Financial Crisis but Didn’t","authors":"L. Randall Wray","doi":"10.2139/SSRN.1912125","DOIUrl":"https://doi.org/10.2139/SSRN.1912125","url":null,"abstract":"In this paper, I first quickly recount the causes and consequences of the global financial crisis (GFC). Of course, the triggering event was the unfolding of the subprime crisis; however, I argue that the financial system was already so fragile that just about anything could have caused the collapse. I then move on to an assessment of the lessons we should have learned. Briefly, these include: (a) the GFC was not a liquidity crisis, (b) underwriting matters, (c) unregulated and unsupervised financial institutions naturally evolve into control frauds, and (d) the worst part is the cover-up of the crimes. I argue that we cannot resolve the crisis until we begin going after the fraud. Finally, I outline an agenda for reform, along the lines suggested by the work of Hyman P. Minsky.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132884079","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Is Corporate Governance Relevant During the Financial Crisis? Cross-Country Evidence","authors":"Kartick Gupta, C. Krishnamurti, A. Tourani-Rad","doi":"10.2139/ssrn.1792948","DOIUrl":"https://doi.org/10.2139/ssrn.1792948","url":null,"abstract":"We study the impact of internal corporate governance on performance during the current financial crisis for a comprehensive cross-country sample of 4046 publicly traded non-financial firms from the U.S. and 22 developed countries. Using a broad-based index of corporate governance quality, we find that well governed firms do not outperform poorly governed firms. We explore three potential explanations for the lack of significant impact of corporate governance quality on performance. First, we examine whether cross-country differences in institutional development have an impact on the effect of corporate governance on performance. Second, we investigate whether a narrowing down of the informationally efficient segment of the stock markets during the crisis can explain the results. We do not find support for either of these conjectures. Finally, we examine whether stock markets generally became less efficient in incorporating firm-specific information into stock prices during the crisis. Our empirical evidence is consistent with the latter view that during the crisis stock markets in developed countries became less efficient in incorporating firm-specific information into prices.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124479312","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Corporate Diversification, Managerial Ownership, and Firm Value: Evidence from the Thai Financial Crisis","authors":"C. Charoenwong, David K. Ding, P. Jiraporn","doi":"10.2139/ssrn.1776485","DOIUrl":"https://doi.org/10.2139/ssrn.1776485","url":null,"abstract":"This study investigates whether corporate diversification in Thailand led to value creation or destruction. The evidence shows that, like studies in developed countries, companies listed on the Stock Exchange of Thailand (SET), on average, experience a value loss of more than 10% through their corporate diversification. The results suggest that the value loss due to diversification stems from the presence of agency costs. The Asian Financial Crisis did not alter the propensity of Thai firms to diversify and that the level of managerial ownership in a firm is not affected by the Crisis.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127928454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Selling Citigroup: A Simulation of the U.S. Treasury’s $37 Billion TARP Share Sale","authors":"Linus Wilson","doi":"10.2139/SSRN.1600298","DOIUrl":"https://doi.org/10.2139/SSRN.1600298","url":null,"abstract":"On April 26, 2010, the U.S. Treasury had 163 trading days to sell a $37 billion dollar stake of 7.7 billion shares in Citigroup. Citigroup’s stock price on April 23, 2010, was well above the U.S. Treasury’s “break even” price of $3.25. The U.S. Treasury announced that it planned an at-the-market sale over about six months. This paper uses Monte Carlo simulations to argue that the U.S. Treasury bore a 17 percent chance of not completing the sale if it refused to sell its shares at a loss and sold no more than 50 million shares per day. The author argues the government could have had less downside and idiosyncratic risk by selling a significant fraction of its holdings in an underwritten offering early in the selling period.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"48 13","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120868736","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Myopia and the Global Financial Crisis: Context-Specific Reasoning, Market Structure, and Institutional Governance","authors":"G. Clark","doi":"10.2139/ssrn.1564849","DOIUrl":"https://doi.org/10.2139/ssrn.1564849","url":null,"abstract":"Many people are unable or unwilling to spend the resources necessary to look beyond the short-term and integrate the local with the global. As illustrated by the global financial crisis, the costs of myopia for individual and collective welfare can be far-reaching. In the context of the global financial crisis, I survey the costs of myopia and move on to the experimental evidence on the nature and scope of time/space myopia referencing early work by Kahneman and Tversky. Having put the case for the importance of myopia against those who assume perfection and those who believe human beings are Bayesian by impulse or by training, I consider the interaction between human predilections and the market environment in which decisions must be made. Different levels of behavioural sophistication combined with being embedded in so-called \"reinforcing\" or \"regulatory\" environments can give rise to quite different expressions of myopia with implications for the governance of institutions and government policy. Looking forward, it is suggested that whether or not myopia can be in some sense managed will have enormous implications for how we cope with the prospect of increasing global financial market volatility over the coming decades.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115146049","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Corporate Governance Lessons from the Financial Crisis","authors":"H. Lehuedé, G. Kirkpatrick, Dorothee Teichmann","doi":"10.2139/ssrn.2393978","DOIUrl":"https://doi.org/10.2139/ssrn.2393978","url":null,"abstract":"This report analyses the impact of failures and weaknesses in corporate governance on the financial crisis, including risk management systems and executive salaries. It concludes that the financial crisis can be to an important extent attributed to failures and weaknesses in corporate governance arrangements which did not serve their purpose to safeguard against excessive risk taking in a number of financial services companies.Accounting standards and regulatory requirements have also proved insufficient in some areas. Last but not least, remuneration systems have in a number of cases not been closely related to the strategy and risk appetite of the company and its longer term interests. The article also suggests that the importance of qualified board oversight and robust risk management is not limited to financial institutions. The remuneration of boards and senior management also remains a highly controversial issue in many OECD countries. The current turmoil suggests a need for the OECD to re-examine the adequacy of its corporate governance principles in these key areas.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133071515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Revaluation of the State","authors":"Peter Kwint","doi":"10.37974/ALF.74","DOIUrl":"https://doi.org/10.37974/ALF.74","url":null,"abstract":"In order to learn valuable lessons from the current crisis, the many different causes of the crisis need to be considered. While the author argues that prediction has proven itself an useless tool, Peter Kwint submits that one can make assumptions about the likeliness of future changes, such as management remuneration, stronger supervisory bodies and the questionable role of credit rating agencies. Yet Peter Kwint argues more is needed. The current crisis has its origins in the fundamentals of neo-liberal capitalism and if one has the ambition to prevent a re-occurrence, this is where the solutions are to be found. He argues many different measures should be taken, all briefly summarised in the revaluation of the state as main arranging and supervising principle of the economy.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115460268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Restorative Justice, White-Collar Crime, and the 2008 Financial Crisis","authors":"Justin Rex","doi":"10.2139/ssrn.3518102","DOIUrl":"https://doi.org/10.2139/ssrn.3518102","url":null,"abstract":"Despite potential criminal behavior, no senior executives from major U.S. financial institutions were incarcerated for actions related to the 2008 financial crisis, an outcome decried by a variety of academics, journalists, and judges, as well as the broader public. This critique is premised on a retributive theory of justice and the belief that incarceration is an effective deterrent against future crime. But are calls for more criminal sanctions warranted? Restorative justice offers an alternative lens to critically evaluate the retributive paradigm that supports calls to put more bankers in jail, and underlays the broader approach to criminal justice in the U.S. Though restorative justice has been increasingly used around the world for blue-collar street crimes and state crimes, its theory and application to white collar crime is less well developed. This research fills that gap by evaluating the governmental response to financial wrongdoing related to the 2008 financial crisis through the lens of restorative justice. I argue that a restorative justice approach to financial regulation is theoretically desirable and outline a variety of financial regulatory reforms to more closely align the Department of Justice’s approach to white-collar financial crime and federal financial regulators’ approach to banking regulation with restorative justice principles.","PeriodicalId":418861,"journal":{"name":"CGN: Effects on Corporate Governance in Financial & Economic Crises (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128525498","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}