Strategy

Entrepreneurs face significant nondiversifiable business risks. We build a dynamic incomplete markets model of entrepreneurial firms to demonstrate the important implications of nondiversifiable risks for entrepreneurs' interdependent consumption, portfolio allocation, financing, investment, and business exit (cash-out and default) decisions. The optimal capital structure is determined by a generalized tradeoff model where risky debt provides significant diversification benefits.

When it comes to the local economy, the local government wears more than one hat: it regulates land use and owns real property and has the authority to exercise the power of eminent domain. Each of these legal powers affects local real estate markets in ways that reach beyond local government's role as tax collector and provider of public goods and services. At different times and for different purposes, planners attempt to harness or to stimulate the forces of supply and demand in real estate markets.

Public-private partnerships (PPPs) are a favored strategy for implementing complex, large-scale projects. For more than thirty years, U.S. government officials have used PPPs to redevelop downtowns, revitalize neighborhoods, and foster economic development. Across the globe, policy makers see such arrangements as an innovative and resourceful means for dealing with the intensifying demands of urbanization. In particular, PPPs can play a central role in meeting the pressing demand for new, large-scale infrastructure investments and the equally urgent need to refurbish existing systems.

The relevance and importance of marketing in innovation management has been questioned in recent years. Marketing has been blamed directly or indirectly for poor returns on investment in innovation, and marketing models of the diffusion of innovations have not been widely adopted. In this monograph we argue that marketing is currently in a unique position to reaffirm its critical role in innovation management. We review some recent research that has already started this "reinstatement" process and propose some future directions that may help complete it.

Trevor Harris and his colleagues at Morgan Stanley have developed ModelWare, which attempts to assess the intrinsic value of enterprises. In this part, they begin with adjustments to reported accounting data, attempting to move accounting metrics closer to economic reality for each company. They then apply the basic concepts of the discounted cash flow approach described in Part I, such as the tradeoff between risk and reward, and consider the components of return on equity, including operating margins, asset turnover, and financial leverage.

We develop a competitive pricing model which combines the complexity of time-varying demand and cost functions and that of scale economies arising from dynamic lot sizing costs. Each firm can replenish inventory in each of the T periods into which the planning horizon is partitioned. Fixed as well as variable procurement costs are incurred for each procurement order, along with inventory carrying costs. Each firm adopts, at the beginning of the planning horizon, a (single) price to be employed throughout the horizon.

As the record of Fed interventions from December 2007 to December 2008 make abundantly clear, a foremost concern of monetary authorities in responding to the financial crisis has been to avoid a repeat of the great depression, and especially a repeat of the monetary contraction identified as the major cause of the 1930s depression.

Financial innovations often respond to regulation by sidestepping regulatory restrictions that would otherwise limit activities in which people wish to engage. Securitization of loans (e.g., credit card receivables, or subprime residential mortgages) is often portrayed, correctly, as having arisen in part as a means of "arbitraging" regulatory capital requirements by booking assets off the balance sheets of regulated banks.

We investigate pricing effects of the joint production of loans and security underwritings. We control for firm and borrower characteristics, including differences in sequencing, which are important for pricing. Contrary to previous studies, when banks combine lending and underwriting within the same customer relationship they charge premiums for both loans and underwriting services. Abstracting from effects of joint production within relationships, depository banks engaged in underwriting price lending and underwriting more cheaply than stand alone investment banks.