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Study On Asymmetric Information Problem And It's Strategy In Venture Investment

Posted on:2005-12-02Degree:MasterType:Thesis
Country:ChinaCandidate:S Y HeFull Text:PDF
GTID:2156360125964820Subject:Industrial Economics
Abstract/Summary:PDF Full Text Request
Venture Capital has been characterized by both great venture and great interest. Three kinds of people are main player of venture investment. They are venturing found investors, venture entrepreneurs, and venture capitalists. As sponsors of venturing found, venture capitalists create Investment Corporation Limited. Found investors also create the corporation.To run and to manage found is the main responsibilities of venture capitalists. They also have to choose valuable investment project and provide capital for the project. Capitalists and entrepreneurs cooperate positively so that they can supervise the project and make some important strategic decision. So there are double relationships between agent and principal in the area of venture investment. One lies in the relationship between venture capitalists and venture entrepreneurs, the other lies in capitalists and found investors. Then adverse selection and moral hazard have become the key problems of venture investment.As far as information economics is concerned, private information has resulted in market failure and inefficiency for resource allocation course of asymmetric information. It's necessary for active market to sign the contract that can be conducted. But as usual, the contract is not prefect. Some reasons are worthy of figuring out. There are complications and unconformities of future, and also there is the conflict between opportunism and limited intellect of people.Because of the imperfection of contact, the capital owner has the remnant control rights or income rights except the special rights declared in contact. In the venture investment field, the distribution and transfer of residual control rights are the benefit drive power of venture capitalist, venture enterprise and venture fund.The domestic and oversea scholars have gone deep in the research on venture investment in the views of system economics, management economics, investment economics, government economics, and property right economics. But there is little people have a deep research on microcosmic factors of venture capital market in the view of information economics. So the main innovation of my thesis lies in the integration between information economics and the theory of venture investment. And then, the thesis has analyzed the investing mechanism, adverse selection and moralhazard course of asymmetric information.
Keywords/Search Tags:venture capital, asymmetric information, diplex principal and agent, imperfection contract, residual control right
PDF Full Text Request
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