The origins of financial innovations have attracted little empirical scrutiny. Using Wall Street Journal articles as an indicator, this paper examines which institutions were the key financial innovators between 1990 and 2002. The evidence suggests that smaller firms account for a disproportionate share of the innovations. Less profitable firms innovate more, though in the years subsequent to the introduction of the innovation, the profitability of the innovators increases significantly. Finally, older, less leveraged firms located in regions with more financial innovations innovate more. While several of the determinants of patenting are similar, small and unprofitable firms do not patent disproportionately.

This paper examines the timing of initial public offerings and private financings by venture capitalists. Using a sample of 350 privately held venture-backed biotechnology firms between 1978 and 1992, I show that these companies go public when equity valuations are high and employ private financings when values are lower. Seasoned venture capitalists appear to be particularly proficient at taking companies public near market peaks. The results are robust to a variety of controls and alternative explanations.

[Bank-affiliated private equity groups account for 30% of all private equity investments. Their market share is highest during peaks of the private equity market, when the parent banks arrange more debt financing for in-house transactions yet have the lowest exposure to debt. Using financing terms and ex post performance, we show overall that banks do not make superior equity investments to those of stand-alone private equity groups. Instead, they appear to expand their private equity engagement to take advantage of the credit market booms, while capturing private benefits from cross-selling of other banking services.]

Venture capital distributions, a legal form of insider trading, provides an ideal arena for examining the share price impact of transactions by informed parties. These sales, which occur after substantial run-ups in share value, generate a substantial price reaction immediately around the event. In the months after distribution, returns apparently continue to be negative. When the short- and long-run reactions are decomposed, they are consistent with the view that venture capitalists use inside information to time stock distributions: Distributions of firms brought public by lower quality underwriters and of less seasoned firms have more negative price reactions.

Within the past few years, public efforts have sought to encourage individual, or “angel”, investors. This article provides an overview of the motivations for these efforts. It assesses the underlying challenges that the financing of young growth firms pose, the ways that specialized financial intermediaries address them, and the rationales for public efforts to encourage angel investors. The final section raises a set of questions about the practical implementation of these efforts.

This paper empirically examines the 'long purse' hypothesis, formalized by Patrick Bolton and David Scharfstein (1990), that incumbents may drive out entrants through aggressive pricing. The author analyzes the pricing of 733 disk drives between 1980 and 1988. Drives that are adjacent to those manufactured by thinly capitalized undiversified rivals are priced lower than other drives during the later years in the sample, when little equity financing was available to these firms. The results are robust to controls for alternative hypotheses and to other specifications of the hedonic regression.

VOLUME 1 Introduction D. Collard Principles and Methods of Industrial Peace, 1905, 260pp Economic Science in Relation to Practice, 1908, 32pp VOLUME 2 Wealth and Welfare, 1912, 524pp VOLUME 3 Economics of Welfare [1920] 1932 4th ed., 868pp VOLUME 4 Unemployment, 1914, 258pp The Political Economy of War, [1921] 2nd ed., 1940, 176pp VOLUME 5 Essays in Applied Economics, 1923, 205pp VOLUME 6 Industrial Fluctuations, [1927] 2nd ed., 1929, 447pp VOLUME 7 A Study in Public Finance, [1928] 3rd ed., 1947, 303pp VOLUME 8 The Theory of Unemployment, 1933, 344pp VOLUME 9 The Economics of Stationary States, 1935, 337pp VOLUME 10 Employment and Equilibrium, [1941] 2nd ed., 1949, 293pp VOLUME 11 Income: An Introduction to Economics, 1946, 125pp Income Revisited, 1955, 94pp VOLUME 12 Aspects of British Economic History 1918-1925, 1947, 259pp VOLUME 13 Keynes General Theory, 1950, 77pp Alfred Marshall and Current Thought, 1953, 92pp VOLUME 14 Essays in Economics, 1952, 247pp

Using a difference-in-differences approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms' incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs.