Arbeitspapier
Financial institutions and the allocation of talent
The paper shows that uninformed finance gives rise to excessive entry, both in human-capital-intensive and in conventional industries when the financial institutions cannot identify the entrepreneurial talent.Introduction of informed capital (eg venture capital finance) with superior screening ability results in an institutional equilibrium with efficiency gains in human-capital industries.Contrary to received wisdom, the institutional equilibrium with informed capital is characterised by more limited entry to an industry, which requires highly talented human capital. Unexpectedly, the total welfare effect is ambiguous, as the allocation of non-informed capital is now less efficient in the conventional industry.The institutional equilibrium is shaped by investors' risk preferences, costs of establishing uninformed and informed capital, and the initial distribution ot talent in the economy.
- Sprache
-
Englisch
- ISBN
-
951-686-771-5
- Erschienen in
-
Series: Bank of Finland Discussion Papers ; No. 5/2002
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
- Thema
-
allocation of talent
asymmetric information
financial institutions
venture capital
institutional equilibrium
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kanniainen, Vesa
Leppämäki, Mikko
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Finland
- (wo)
-
Helsinki
- (wann)
-
2002
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Kanniainen, Vesa
- Leppämäki, Mikko
- Bank of Finland
Entstanden
- 2002
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