Abstract

http://ssrn.com/abstract=2002287
 
 

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Inter-Company Matching and the Supply of Informed Capital


Fernando Anjos


University of Texas at Austin

Alejandro Drexler


University of Texas at Austin - McCombs School of Business

June 17, 2013


Abstract:     
We model an economy where it is beneficial for high-type organizations to collaborate with other high types (assortative matching), and where the assortative-matching pattern allows informed financiers to provide inexpensive funds to partner companies of their high-type ventures. The funding benefit associated with finding a high-type partner provides an additional incentive for search, and we show how a critical mass of informed capital sometimes becomes a necessary condition for an efficient equilibrium to obtain. We also conduct a brief empirical analysis - combining data on alliances and venture-capital deals - that yields results consistent with the mechanisms proposed in the model.

Number of Pages in PDF File: 61

Keywords: venture capital, financial intermediation, alliances, matching

JEL Classification: D20, D80, G24, G32, L20

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Date posted: February 10, 2012 ; Last revised: June 17, 2013

Suggested Citation

Anjos, Fernando and Drexler, Alejandro, Inter-Company Matching and the Supply of Informed Capital (June 17, 2013). Available at SSRN: http://ssrn.com/abstract=2002287 or http://dx.doi.org/10.2139/ssrn.2002287

Contact Information

Fernando Anjos (Contact Author)
University of Texas at Austin ( email )
Austin, TX 78712
United States
5122326825 (Phone)
HOME PAGE: http://sites.google.com/site/fernandoanjossite/home
Alejandro Drexler
University of Texas at Austin - McCombs School of Business ( email )
Austin, TX 78712
United States
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