Conditional Allocation of Control Rights in Venture Capital Finance

When a young entrepreneurial firm matures, it is often necessary to replace the founding entrepreneur by a professional manager. This replacement decision can be affected by the private benefits of control enjoyed by the entrepreneur which gives rise to a conflict of interest between the entrepreneur and the venture capitalist. We show that a combination of convertible securities and contingent control rights can be used to resolve this conflict efficiently. This contractual arrangement is frequently observed in venture capital finance

Regulating financial conglomerates

We investigate the optimal regulation of financial conglomerates which combine a bank and a non-bank financial institution. The conglomerate’s risk-taking incentives depend upon the level of market discipline it faces, which in turn is determined by the conglomerate’s liability structure. We examine optimal capital requirements for stand-alone institutions, for integrated financial conglomerates, and for financial conglomerates that are structured as holding companies. For a given risk profile, integrated conglomerates have a lower probability of failure than either their stand-alone or decentralized equivalent. However, when risk profiles are endogenously selected, conglomeration may extend the reach of the deposit insurance safety net and hence provide incentives for increased risk-taking. As a result, integrated conglomerates may optimally attract higher capital requirements. In contrast, decentralised conglomerates are able to hold assets in the socially most efficient place. Their optimal capital requirements encourage this. Hence, the practice of “regulatory arbitrage”, or of transferring assets from one balance sheet to another, is welfare-increasing. We discuss the policy implications of our finding in the context not only of the present debate on the regulation of financial conglomerates but also in the light of existing US bank holding company regulation

Soil nitrous oxide emissions from grassland: potential inhibitor effect of hippuric acid

In grassland systems, cattle and sheep urine patches are recognized as nitrous oxide (N2O) emission hot spots due to the high urinary nitrogen (N) concentrations. Hippuric acid (HA) is one of the constituents of ruminant urine that has been reported as a natural inhibitor of soil N2O emissions. The aim of this study was to examine the potential for elevated ruminant urine HA concentrations to reduce N2O emissions, in situ, on an acidic heavy clay soil under poorly drained conditions (WFPS > 85%). A randomized complete block design experiment with three replications and four treatments was conducted using the closed-static-flux chamber methodology. The four treatments were applied inside the chambers: control with no artificial urine application (C), control artificial urine (U), and enriched artificial urine containing two rates of HA (55.8 and 90 mM, U+HA1, U+HA2). Soil inorganic-N, soil dissolved organic carbon (DOC), soil pH as well as N2O and methane (CH4) fluxes were monitored over a 79-day period. Although N2O emissions were not affected by the HA enriched urine treatments, U+HA2 positively affected the retention of N as NH4+ until day 3, when the soil pH dropped to values <5. Subsequently, as a consequence of rainfall events and soil acidification, it is likely that leaching or sorption onto clay reduced the efficacy of HA, masking any treatment differential effect on N2O emissions. Moreover, CH4 fluxes as well as DOC results reflected the soil anaerobic conditions which did not favour nitrification processes. Further research is needed to determine the fate of HA into the soil which might clarify the lack of an in situ effect of this compoun

Peculiarities of selecting the gearboxes and wheel shift coefficients in the optimization of drive gear transmissions

В якості вузлового моменту оптимізаційного проектування тягових зубчастих передач залізничного рухомого складу виділено процедуру обґрунтованого вибору коефіцієнтів зміщення шестерень і коліс за рахунок використання відповідних блокувальних контурів. Обґрунтовано актуальність досліджень з розроблення методичного забезпечення для раціонального отримання блокувальних контурів при проектуванні тягових зубастих передач. Представлені розроблені математичні залежності, що пов’язують фіксовані величині обмежувальних і контрольованих параметрів передач з числами зубців і коефіцієнтами зміщення шестерні та колеса. Їх використання дозволяє отримувати конкретні блокувальні контури для вибору коефіцієнтів зміщення шестерні та колеса при оптимізаційному проектуванні тягових зубчастих передач з різними початковими параметрами. Наведено приклад практичної реалізації розроблених математичних залежностей при отриманні блокувального контуру для вибору коефіцієнтів зміщення шестерні та колеса тягової зубчастої передачі сучасного магістрального вантажного тепловозу. Зроблено висновок про доцільність використання запропонованого методичного забезпечення при оптимізаційному проектуванні тягових зубчатих передач.As a key point in the optimization design of traction gears of the railway rolling stock, a procedure for a reasonable choice of the coefficients for the displacement of gears and wheels is provided by using the appropriate blocking circuits. The relevance of studies on the development of methodological support for the rational production of blocking contours in the design of traction-toothed gears is substantiated. The developed mathematical dependences connecting the fixed values of the limiting and controlled parameters of the gears with the numbers of the teeth and the gearing coefficients of the gears and wheels are presented. Their use makes it possible to obtain specific blocking contours for the selection of gear and wheel bias coefficients in the optimization design of traction gears with different initial parameters. An example of the practical implementation of the developed mathematical dependencies in obtaining a blocking contour for selecting the gear displacement coefficients and the traction gear wheel of a modern mainline freight locomotive is given. The conclusion is made about the expediency of using the proposed methodological support in the optimization design of traction gears