The Role of Agents in Private Entrepreneurial Finance

61 Pages Posted: 4 Dec 2010 Last revised: 12 Mar 2013

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

J. Ari Pandes

University of Calgary - Haskayne School of Business

Michael J. Robinson

University of Calgary - Haskayne School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: November 2, 2012

Abstract

In this paper we examine for the first time the role of agents in private-market entrepreneurial financings. After controlling for the endogenous issuer-agent matching and a whole host of other potential determinants, the empirical findings in this paper indicate that agents attract more investors, broaden the geographic investor and capital base, and increase the percentage of investors and capital from investors that are most vulnerable to the costs of information asymmetry. We also find that more reputable agents generally provide a higher quality service than less reputable agents, and consequently charge higher fees. Our findings provide strong support for the certification and networking role of agents in the private entrepreneurial financing market, and no support for the idea that agents use their market power to take advantage of private entrepreneurial firms.

Keywords: Private financing, Agent, Information asymmetry, Certification, Networking

JEL Classification: G24, G32

Suggested Citation

Cumming, Douglas J. and Pandes, J. Ari and Robinson, Michael J., The Role of Agents in Private Entrepreneurial Finance (November 2, 2012). Available at SSRN: https://ssrn.com/abstract=1718720 or http://dx.doi.org/10.2139/ssrn.1718720

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

J. Ari Pandes (Contact Author)

University of Calgary - Haskayne School of Business ( email )

2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada
403 220-4350 (Phone)

Michael J. Robinson

University of Calgary - Haskayne School of Business ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
125
Abstract Views
1,006
rank
162,936
PlumX Metrics