The Effect of Information Asymmetry and Bargaining Power on the Choice among Financing Securities for US Venture Firms

• Main Authors: Chien-Liang Liao, 廖健良
• Other Authors: Hsiou-Wei W. Lin
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/veuf4k

碩士 === 國立交通大學 === 企業管理碩士學程 === 96 === Prior studies of the financing contracts between venture capitalists and entrepreneurs most typically focus on analytical deduction. Specifically, they investigate agency settings with double moral hazard and/or adverse selection. In contrast, this study empirically tests the effect of information asymmetry and bargaining power on the choice among financing securities including debt, convertible debt, convertible preferred stock, and convertible debt plus convertible preferred stock. The proxy variables for moral hazard and/or adverse selection are volatility of earnings, percentage of research and development expense, percentage of intangible assets, and type of industry. Consistent with the notion that new venture firms adopt financing contracts to alleviate earnings manipulation and/or moral hazard, the results show that the companies with volatile earnings, high intangible assets, and firms in the biotechnology industry tend to issue more debt or convertible debt.