Location, Proximity, and M&A Transactions

In this paper, we examine how the geographic location of firms affects acquisition decisions and value creation for acquirers in takeover transactions. We find that firms located in an urban area are more likely to receive a takeover bid and complete a takeover transaction as a target than firms located in rural areas, and takeover deals involving an urban target are associated with higher acquirer announcement returns, after controlling for the proximity between the target and the acquirer. In addition, a target\u27s urban location significantly attenuates the negative effect of a long distance between the target and the acquirer on acquirer returns, a fact that is documented in the existing literature. Our findings reveal a previously underexplored force—firm location—that can affect takeover transactions, in addition to proximity. Our paper suggests that a firm\u27s location plays an important role in facilitating the dissemination of soft information and enhancing information-based synergies

Spectrum-Efficient Triple-Layer Hybrid Optical OFDM for IM/DD-Based Optical Wireless Communications

In this paper, a triple-layer hybrid optical orthogonal frequency division multiplexing (THO-OFDM) for intensity modulation with direct detection (IM/DD) systems with a high spectral efficiency is proposed. We combine N-point asymmetrically clipped optical orthogonal frequency division multiplexing (ACO-OFDM), N/2-point ACO-OFDM, and N/2-point pulse amplitude modulated discrete multitoned (PAM-DMT) in a single frame for simultaneous transmission. The time- and frequency-domain demodulation methods are introduced by fully exploiting the special structure of the proposed THO-OFDM. Theoretical analysis show that, the proposed THO-OFDM can reach the spectral efficiency limit of the conventional layered ACO-OFDM (LACO-OFDM). Simulation results demonstrate that, the time-domain receiver offers improved bit error rate (BER) performance compared with the frequency-domain with ∼40% reduced computation complexity when using 512 subcarriers. Furthermore, we show a 3 dB improvement in the peak-to-average power ratio (PAPR) compared with LACO-OFDM for the same three layers

Do Entrepreneurs Make Good VCs?

Using hand-collected data on the backgrounds of venture capitalists (VCs), we show that in a typical venture capital firm in our sample, 13.9% of VCs have been entrepreneurs before becoming a VC, referred to as entrepreneur VCs. Both OLS and 2SLS analyses suggest that venture capital firms employing a greater fraction of entrepreneur VCs have better performance. In addition, the positive effect of entrepreneur VCs on venture capital firm performance is stronger for smaller and younger venture capital firms, and venture capital firms specializing in high-tech industries and in early-stage investments. We further explore performance implications of VCs with prior experience in a finance-related field (i.e., Wall Street experience) and prior experience in a non-finance related field (i.e., Main Street experience). We find that contrary to prior experience in entrepreneurship, neither prior experience in Wall Street nor in Main Street is significantly related to venture capital firm performance. Finally, we provide evidence that entrepreneur VCs have greater individual performance in terms of VC rankings established by Forbes. Overall, our results are consistent with the idea that entrepreneur VCs have a better understanding of the business of starting and developing a new firm due to their first-hands experience, and play an important role in reducing the gaps in information and difference of opinions between an entrepreneur and the VCs backing the entrepreneur

Unleashing Innovation

Using a sample of venture capital (VC)-backed initial public offering (IPO) firms, we study the effect of financial intermediaries’ tight leash on entrepreneurs’ innovation productivity. We find that financial intermediaries’ tight leash impedes innovation: IPO firms are significantly less innovative when VCs interfere with their development more frequently through staging—as measured by a larger number of VC financing rounds. To establish causality, we exploit plausibly exogenous variation in the frequency of direct flights between VC domiciles and IPO firm headquarters that are due to airline restructuring. Our identification tests suggest a negative, causal effect of VC staging on firm innovation. Furthermore, staging is more detrimental to innovation when innovation is more difficult to achieve and when VCs are less experienced with the industry in which their entrepreneurial firms operate. By documenting a previously underrecognized adverse consequence of VC stage financing, our evidence suggests that contract mechanisms are at play so that short-termist incentives can be cultivated even in a private equity market populated with long-term, sophisticated investors

Do Unions Affect Innovation?

We examine the effect of unionization on firm innovation, using a regression discontinuity design that relies on “locally” exogenous variation generated by elections that pass or fail by a small margin of votes. Passing a union election results in an 8.7% (12.5%) decline in patent quantity (quality) three years after the election. A reduction in R&D expenditures, reduced productivity of inventors, and departures of innovative inventors appear to be plausible underlying mechanisms through which unionization impedes firm innovation. In response to unionization, firms move their innovation activities away from states where union elections win. Our paper provides new insights into the real effects of unionization