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Endogenous networks in investment syndication

  • Wang, Lanfang
  • Wang, Susheng
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    As an effective investment strategy, investors often invest jointly in a company by forming a syndicate. The unique feature of this paper is that it endogenizes the formation of an investment syndicate. We provide a theory on the endogenous formation of networks in investment syndication and analyze how several key factors such as risk aversion, productivity, risk and cost affect incentive and syndicated investment. We also apply the theory to venture capital investment and identify empirical evidence in support of it.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0929119912000351
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    Article provided by Elsevier in its journal Journal of Corporate Finance.

    Volume (Year): 18 (2012)
    Issue (Month): 3 ()
    Pages: 640-663

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    Handle: RePEc:eee:corfin:v:18:y:2012:i:3:p:640-663
    DOI: 10.1016/j.jcorpfin.2012.03.004
    Contact details of provider: Web page: http://www.elsevier.com/locate/jcorpfin

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