TY  - JOUR
AU  - Kaplan,Steven N.
AU  - Martel,Frederic
AU  - Stromberg,Per
TI  - How Do Legal Differences and Learning Affect Financial Contracts?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10097
PY  - 2003
Y2  - November 2003
UR  - http://www.nber.org/papers/w10097
L1  - http://www.nber.org/papers/w10097.pdf
N1  - Author contact info:
Steven N. Kaplan
Booth School of Business
The University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-4513
Fax: 773/702-0458
E-Mail: steven.kaplan@chicagobooth.edu

Per Stromberg
Institute for Financial Research (SIFR)
Drottninggatan 89
SE-113 60 Stockholm
Sweden
Tel: +46 8 728-5128
Fax: +46 8 728 5130
E-Mail: per.stromberg@sifr.org
AB  - We analyze venture capital (VC) investments in twenty-three non-U.S. countries and compare them to VC investments in the U.S. 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 U.S.-style contracts regardless of legal regime. In most specifications, legal regime becomes insignificant controlling for VC sophistication. VCs who use U.S.-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.
ER  -