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NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Alexander Tsai

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January 2000Do Equity Financing Cycles Matter? Evidence from Biotechnology Alliances
with Josh Lerner: w7464
While the variability of public equity financing has been long recognized, its impact on firms has attracted little empirical scrutiny. This paper examines one setting where theory suggests that variations in financing conditions should matter, alliances between small R&D firms and major corporations: Aghion and Tirole [1994] suggest that when financial markets are weak, assigning the control rights to the small firm may be sometimes desirable but not feasible. The performance of 200 agreements entered into by biotechnology firms between 1980 and 1995 suggests that financing availability does matter. Consistent with theory, agreements signed during periods with little external equity financing that assign the bulk of the control to the corporate partner are significantly less successful...

Published: Journal of Financial Economics, 67 (March 2003) 411-446. citation courtesy of

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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