Small Business Uniqueness and the Theory of Financial Management

Small businesses do not share the same financial management problems with large businesses. This paper shows that the source of the differences could be traced to several characteristics unique to small businesses. This uniqueness in turn creates a whole new set of financial management issues. The major implication is that, yes, there are new and interesting topics in small business financial management research

Toward a Corporate Finance Theory for the Entrepreneurial Firm

Corporate finance for the entrepreneurial firm is fundamentally different from that of the traditional firm. The standard problems and solutions to both investment and financing are reformulated in this paper. The formulation is intended to capture two distinguishing features of entrepreneurial finance: 1) Although new ventures yield negative returns on average, they are in aggregate welfare increasing for the economy, after considering their positive externalities. 2) Due to new ventures’ lack of consistent cash flows, which precludes the use of debt, the debt versus equity financing choice is replaced by the choice between the entrepreneurs’ desire for wealth versus control; taking “a larger slice of a smaller pie,” or “a smaller slice of a larger pie.

On the Theory of Finance for Privately Held Firms

This paper is a first attempt at differentiating the problems of finance of the privately held small businesses from their larger counterparts. Small businesses, though not concerned with the problems and opportunities associated with publicly traded firms, have different types of complexities, such as shorter expected life, presence of estate tax, intergenerational transfer problems, and prevalence of implicit contracts. Some standard problems like agency and asymmetric information are also more complex. The relatively high transaction costs faced by small businesses in all types of financial decisions also preclude a sizable subset of available choices

Evidence on the Lack of Separation between Business and Personal Risks among Small Businesses

Small business researchers conjecture that there is little separation between business and personal risks among small businesses. Personal assets and wealth can be subject to business risks in the form of an implicit or explicit claim depending on the organizational form and whether personal commitments are pledged by owners. The choice of organizational form can be considered a mechanism to increase the degree of separation; however, lenders\u27 requirements for personal commitments mitigate the benefits of limited liability provisions. This paper examines the role of personal collateral and personal guarantees in augmenting implicit claims on business and personal assets with explicit claims on personal assets and personal wealth. We document the degree of non-separation of business and personal risks for 692 firms. Our results suggests that small business owners have a significant incidence of personal assets and wealth pledged for business loans, even for organizational forms such as S-corporations and C-corporations with limited legal liability. These results confirm the conjecture that there is a lack of separation between business and personal risks. The lack of separation of business and personal risks has important policy implications for the borrowing patterns and access to credit markets of small businesses

Efficient Portfolios Versus Efficient Market

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/108275/1/jfir00282.pd

Evidence That The Common Stock Market Adjusts Fully For Expected Inflation

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/108367/1/jfir00022.pd

Obesity Moderates the Effects of Motivational Interviewing Treatment Outcomes in Fibromyalgia

Objective: Obesity is a common comorbid condition among patients with fibromyalgia (FM). Our objective was to assess if obesity moderates the treatment benefits of exercise-based motivational interviewing (MI) for FM. Methods: This is a secondary data analysis of a completed clinical trial of 198 FM patients who were randomized to receive either MI or attention control (AC). Using body mass index (BMI) to divide participants into obese (BMI >=30 kg/m2) and non-obese (BMI <30 kg m2) groups, mixed linear models were used to determine interaction between treatment arms and obesity status with regards to the primary outcome of global FM symptom severity (Fibromyalgia Impact Questionnaire, FIQ). Secondary measures included pain intensity (Brief Pain Inventory, BPI), 6-minute walk test, and self-reported physical activity (Community Health Activities Model Program for Seniors). Results: Of the 198 participants, 91 (46%) were non-obese and 107 (54%) were obese. On global FM symptom severity (FIQ), the interaction between treatment arms and obesity status was significant (P=0.02). In the non-obese group, MI was associated with a greater improvement in FIQ than AC. In the obese group, MI participants reported less improvement in FIQ compared to AC. The interaction analysis was also significant for BPI pain intensity (P=0.01), but not for the walk test and self-reported physical activity. Discussion: This is the first study to show that obesity negatively affects the treatment efficacy of MI in patients with FM. Our findings suggest that exercise-based MI may be more effective if initiated after weight loss is achieved

Prevalence of established and emerging biomarkers of immune checkpoint inhibitor response in advanced hepatocellular carcinoma.

The clinical deployment of immune checkpoint inhibitors (ICIs) has created a tandem drive for the identification of biomarkers linked to benefit. Comprehensive genomic profiling was performed to evaluate the frequency of genomic biomarkers of ICI response in 755 patients with advanced hepatocellular carcinoma (HCC). Median age was 62 years' old, 73% were male, 46% had extrahepatic disease, 107 had documented hepatitis C, 96 had hepatitis B and 4 patients were coinfected. Median tumor mutation burden (TMB) was 4 mutations/Mb and only 6 tumors (0.8%) were TMB-high. Out of 542 cases assessed for microsatellite instability (MSI), one (0.2%) was MSI-high and TMB-high. Twenty-seven (4%) patients had POLE/D alterations. One patient had a pathogenic POLE R762W mutation but TMB was 4 mutations/Mb. Forty percent had DNA damage response gene alterations. In a small case series (N=17) exploring the relationship between biomarkers and ICI response, one patient (TMB 15 mutations/Mb, MSI-low) had a sustained complete response to nivolumab lasting &gt; 2 years. Otherwise there were no significant genomic or TMB differences between responders, progressors, and those with stable disease. Overall, markers of genomic instability were infrequent in this cohort. Larger clinically annotated datasets are needed to explore genomic and non-genomic determinants of ICI response in HCC

Decoupling by clienteles and by time in the financial markets: the case of two-stage stock-financed mergers

A two-stage stock-financed merger occurs when an acquiring firm first issues shares, and then engages in a cash acquisition shortly afterward. Such deals allow us to test two important hypotheses derived from decoupling: by clienteles via segmentation and by time. The acquirer's value is maximized by selling shares to investors preferring to hold them, and use the raised cash to pay the target shareholders (the decoupling by clienteles hypothesis). Two-stage deals also provide an option to the acquirers by allowing them to decouple their own shares from the correlated target's shares by issuing at an earlier date and wait for good acquisition opportunities (the time decoupling hypothesis). We find empirical evidence in support of both hypotheses