Abstract

http://ssrn.com/abstract=487044
 
 

References (33)



 
 

Citations (60)



 


 



How Do Legal Differences and Learning Affect Financial Contracts?


Steven N. Kaplan


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Frederic Martel


UBS Global Asset Management; University of Lausanne IMD

Per Strömberg


Swedish House of Finance

December 2003

CEPR Discussion Paper No. 4161

Abstract:     
We analyse venture capital (VC) investments in 23 non-US countries and compare them to VC investments in the US. We describe how the contracts allocate cash flow, board, liquidation, and other control rights. In univariate analyses, contracts differ across legal regimes. At the same time, however, more experienced VCs implement US-style contracts regardless of legal regime. In most specifications, legal regime becomes insignificant controlling for VC sophistication. VCs who use US-style contracts fail significantly less often. Financial contracting theories in the presence of fixed costs of learning, therefore, appear to explain contracts along a wide range of legal regimes.

Number of Pages in PDF File: 40

JEL Classification: G24, G32

working papers series





Date posted: January 12, 2004  

Suggested Citation

Kaplan, Steven N. and Martel, Frederic and Strömberg, Per, How Do Legal Differences and Learning Affect Financial Contracts? (December 2003). CEPR Discussion Paper No. 4161. Available at SSRN: http://ssrn.com/abstract=487044

Contact Information

Steven Neil Kaplan
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Frederic Martel
UBS Global Asset Management ( email )
Zurich, CH-8098
Switzerland
+41 1 235 56 93 (Phone)
+41 1 235 55 90 (Fax)
University of Lausanne IMD
Lausanne, 1015
Switzerland
Per Stromberg (Contact Author)
Swedish House of Finance ( email )
Drottninggatan 98
111 60 Stockholm
Sweden

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