Eric Nasica
University of Nice is Sophia Antipolis, Nice, France, ÉCONOMIE, Faculty Member
The topic of this paper is to analyze comparatively the interest and the advantages of the existence of heterogeneous institutions in the Venture Capital activity. We focus on the duality relevant in Europe between Independent Venture... more
The topic of this paper is to analyze comparatively the interest and the advantages of the existence of heterogeneous institutions in the Venture Capital activity. We focus on the duality relevant in Europe between Independent Venture Capitalists and the Bank-Affiliated ones. We first discuss in the second section the different characteristics of these institutions and their comparative advantages in screening and financing risky projects. We then develop a theoretical model which analyses comparatively the two technologies: both IVCs and AVCs take the asymmetric risk in seed and are backed by hedge funds equity or banks at the second round. IVCs syndicate and AVCs use the internal ways of diversification of the bank. Screening technologies are activated in seed and symmetric risks managed during the development phase. We obtain analytical results conform to intuition in the analytical part of the model and concerning the relative advantages and deficits of the two systems. With a s...
Research Interests:
The aim of this paper is to present a “Minskian” model which explicitly deals with the influence of the institutional dynamics on the relation between finance, investment and economic fluctuations. First, the Minskian foundations of the... more
The aim of this paper is to present a “Minskian” model which explicitly deals with the influence of the institutional dynamics on the relation between finance, investment and economic fluctuations. First, the Minskian foundations of the proposed analytical framework are highlighted. Second the dynamical properties of the model are studied, drawing the inferences of a stabilization policy. It is shown that the economy is unstable when the budget policy is not very sensitive to variations in private investment. On the contrary, when, the counter cyclical deficit constraint is flexible enough, the economy is stabilized. These results, that echo recent debates and proposals on budget deficits rules in the EMU, are fully consistent with the way Minsky considers that public authorities may “stabilize an unstable economy”.