What is the Role of Legal Systems in Financial Intermediation? Theory and Evidence

We develop a theory and empirical test of how the legal system affects the relationship between venture capitalists and entrepreneurs. The theory uses a double moral hazard framework to show how optimal contracts and investor actions depend on the quality of the legal system. The empirical evidence is based on a sample of European venture capital deals. The main results are that with better legal protection, investors give more non-contractible support and demand more downside protection. These predictions are supported by the empirical analysis. Using a new empirical approach of comparing two sets of fixed-effect regressions, we also find that the investor’s legal system is more important than that of the company in determining investor behavior.Financial Intermediation;Law and Finance;Corporate Governance;Venture Capital

The Importance of Trust for Investment: Evidence From Venture Capital (Revision of DP 2009-43)

We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment decisions. This holds even after controlling for investor and company fixed effects, geographic distance, information and transaction costs. The national identity of venture capital firms’ individual partners further contributes to the effect of trust. Education and work experience reduce the effect of trust but do not eliminate it. We also examine the relationship between trust and sophisticated contracts involving contingent control rights and find that, even after controlling for endogeneity, they are complements, not substitutes.Venture Capital;Social Capital;Trust;Financial Contracts;Corporate Governance.

PROFESSIONS AND BUSINESSES Architects: Change Certain Provisions Relating to Which Structures Do Not Require the Seal of a Registered Architect; Provide That Nothing Shall Be Construed to Mean That Construction Contract Administration Services Are Required to Be Performed Exclusively by Architects; Change the Provisions Relating to Architect Seals and Documents Required to Be Sealed

The Act provides for a clearer standard for determining when the services of an architect are required by law. Specifically, the Act provides that the seal of an architect is not required for single story buildings less than 5000 square feet in area. The Act also exempts single story pre-engineered buildings from requiring an architect\u27s seal, provide that they are not assembly occupancies, education occupancies, health care occupancies, correctional or detention facilities, hotels, dormitories or lodging facilities, multifamily housing or apartment complexes, care facilities, or facilities that are classified as high hazard. Further, when the drawings and specifications for nonload-bearing interior construction in office structures designed by a registered architect, are prepared by a Georgia registered interior designer, they will be in compliance with the Act. The Act delineates those individuals who are not required to register as architects in Georgia, a well as those documents requiring architects\u27 seals. Finally, the Act allows for general contractors to offer design-build contracts, and provides that the administration services associated with construction contracts are not exclusive to architects

HEALTH Regulation of County and Municipal Hospital Authorities: Extend to Certain Nonprofit Corporations Operating Certain Medical Facilities and Exemption from Open Records and Open Meetings Requirements

The Act provides for Georgia nonprofit corporations, operating hospitals or other medical facilities for the benefit of a Georgia governmental entity (e.g., Medical College of Georgia (MCG) Health Inc.), to benefit from the same exemptions from open records and open meetings requirements that county and municipal hospital authorities have enjoyed since 1989. Specifically, the Act would exempt MCG from the disclosure of any data which could give other hospital authorities a competitive advantage

HEALTH Regulation of County and Municipal Hospital Authorities: Extend to Certain Nonprofit Corporations Operating Certain Medical Facilities and Exemption from Open Records and Open Meetings Requirements

The Act provides for Georgia nonprofit corporations, operating hospitals or other medical facilities for the benefit of a Georgia governmental entity (e.g., Medical College of Georgia (MCG) Health Inc.), to benefit from the same exemptions from open records and open meetings requirements that county and municipal hospital authorities have enjoyed since 1989. Specifically, the Act would exempt MCG from the disclosure of any data which could give other hospital authorities a competitive advantage

Questioning the existence of a unique ground state structure for Si clusters

Density functional and quantum Monte Carlo calculations challenge the existence of a unique ground state structure for certain Si clusters. For Si clusters with more than a dozen atoms the lowest ten isomers are close in energy and for some clusters entropic effects can change the energetic ordering of the configurations. Isotope pure configurations with rotational symmetry and symmetric configurations containing one additional isotope are disfavored by these effects. Comparisons with experiment are thus difficult since a mixture of configurations is to be expected at thermal equilibrium