Contents of Volume 1 xxv
2.3. Self-selection and the endogeneity of the decision to become a conglomerate 433- Theory explaining the conglomerate discount and organizational form 436
3.1. Efficient internal capital markets 438
3.2. Conglomerates and organizational competencies 439
3.3. Diversification and the failure of corporate governance 439
3.4. Diversification and the power within the firm 441
3.5. Neoclassical modelof conglomerates and resource allocation 443 - Investment decisions of conglomerate firms 450
4.1. Investment–cash flow sensitivity 450
4.2. Industry studies 454
4.3. Efficient internal capital markets 456
4.4. Bargaining power within the firm and differential investment opportunities 458
4.5. Investment under a profit—maximizing neoclassical model 461
4.6. Mergers and acquisitions, divestitures and spinoffs 466 - Conclusions: What have we learned? 471
A.1. Shocks and growth in a single industry 472
A.2. Cross-segment effects and the growth of conglomerates 475
References 477
Chapter 9
Venture Capital
PAUL GOMPERS 481
Abstract 482
Keywords 482
- Introduction 483
- The development of the venture capital industry 484
- The venture capital investment process 490
3.1. Exiting venture capital investments 499 - Venture investing and innovation 503
- What we don’t know about venture capital 505
5.1. Understanding risk and return 505
5.2. The internationalization of venture capital 506
References 507
Author Index 511
Subject Index 527