Learning patterns in venture capital investing in new industries

Using an organizational learning perspective, we link the decision by venture capital (VC) firms to invest early in a new high-technology industry to three experiential learning mechanisms: the familiarity associated with accumulation of early funding decisions, the shaping or imprinting effect of the firm’s very first such decision, and the decay or “forgetting” associated with the dormancy of prior such decisions. We find support for these learning patterns using data on the investments made by US VC firms between 1962 and 2004.

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Is Cash becoming Obsolete?

Finding ways to make it easier and more convenient to spend money is the aim of many innovations in the area of electronic payments. A number of innovative electronic payment alternatives are all vying to become the new standard in electronic payments and displace the long time standard, the card with a magnetic strip. Any of these new technologies could make the need to carry cash obsolete.
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Innovation and the global financial crisis – systemic consequences of incompetence

The article applies the concept of incompetence by Polanyi (1962) and the concept of unintended consequences by Merton (1936) to explore the development of a radical financial innovation, securitisation. This innovation changed the context for all actors in the financial industry to such a degree that even the highest regarded experts repeatedly made prediction errors. Read more

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Africa Regional Dialogue on Financial Literacy and Capability

What Is Financial Capability?
Financial literacy concentrates primarily on how to use and manage financial services; how to inform and promote understanding while also affecting behavior. Financial capability includes information and knowledge but differs slightly as it puts an emphasis on attitude and behavior change instead. We are using financial capability due to its focus on behavior change.

Africa Regional Dialogue on Financial Literacy and Capability

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(c) Familia Luchon. Comic strip showcasing financial literacy.

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Predicting Investment Shock Waves: How technological innovations affect risk premiums

Major technological advances have the power to shake up the marketplace. As investment shocks, technological innovations do not affect all firms equally. Some firms benefit, while others lose market share. Because of these risks, investors demand a premium for investing in companies that appear unable to adapt to new technologies, argues Dimitris Papanikolaou, an assistant professor of finance at the Kellogg School of Management. Read more

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