How entrepreneurs make decisions and raise capital
On Tueday 6 September 2022 Jing Lan will hold a trial lecture on a prescribed topic and defend her thesis for the PhD degree at NHH.
Prescribed topic for the trial lecture:
«Financing of small and medium sized firms»
10:15 – 11:00, Aud F, NHH
Title of the thesis:
«Essays on empirical corporate finance»
Entrepreneurial activities contribute an important share of productivity, innovation, and employment to an economy. This dissertation consists of three empirical studies investigating how entrepreneurs make decisions and how their closely-held small and medium-sized enterprises (SMEs) raise capital.
The first paper studies whether and how entrepreneurs’ attention affects corporate performance, using entrepreneurial divorce as a distractive event. There are two main results. First, during the entrepreneurial divorce period, firms that are closely held by the entrepreneurs demonstrate a temporary worsening performance. Second, inattentive entrepreneurs who are distracted by divorce are less engaged in firm investment activities, whereas they are still able to manage firm operating activities. The findings indicate that entrepreneurs’ attention is important to the long-term growth and profitability of SME firms.
The second paper (co-authored with Aksel Mjøs, Xunhua Su, and Han Xia) studies how entrepreneurs use home equity-based borrowing to alleviate financial constraints faced by their closely-held SMEs. Home equity is the difference between the asset and the mortgage values of a house. We show that entrepreneurs’ home equity withdrawals are positively associated with new equity injections into their closely-held existing private firms. The injected capital helps the entrepreneurs to improve firm performance as well as to explore outside business opportunities.
The third paper (co-authored with Michael Axenrod, Carsten Bienz, and Francesca Cornelli) focuses on a later but one of the most important financing stages of private firms, the initial public offering (IPO). We study the role of cornerstone investors in the Nordic IPO market. These investors commit to purchasing shares before an IPO is publicly announced. We find that the involvement of cornerstone investors during an IPO process brings both costs and benefits. On the one hand, the pre-commitment signals early demand and increases the likelihood of the IPO succeeding. On the other hand, involving cornerstone investors introduces lower price efficiency.
12:15 – 14:00, Aud F, NHH
Members of the evaluation committee:
Associate Professor Kyle Lee (leader of the committee), Department of Finance, NHH
Associate Professor, Danielle Zhang, Oslo Met
Associate Professor Einar Bakke, Oslo Met
Associate Professor Aksel Mjøs (main supervisor), Department of Finance, NHH
Professor Walter Pohl, Department of Finance, NHH
Associate Professor Xunhua Su, Department of Finance, NHH (Su passed away August 2021)
The trial lecture and thesis defense will be open to the public.