Investment and Capitalization of Firms in the USA

In the USA today, the precipitous rise of new financial mechanisms for capitalisation of firms as well as the merger and acquisition of others, especially risk equity capital through venture capitalist and investment banking, has sparked growth and helped to bring the economy out of the 1990s recession into a robust continuous growth pattern well positioned for the next century. The scenario is not new. For the venture capitalists of ''Silicon Valley'' in California, the experience is not new. They have seen the new industries arise before, like a phoenix from ashes of ruin, despair and even failure. Venture capital poured into high tech start-up companies has been an enormous source of financial support for the entrepreneurs who head new and growing companies. The mid-1990s marked the most dramatic increase yet recorded. Indicators, such as the NASDAQ document, outlined the solid and continuous growth in high tech industries. The paper discusses investment in US corporations within the context of governance and management of the company. Discussion about the various forms of finance are related to the organisation and management of the US corporation. Critical to any firm today are its ability to find innovative, new products or services. A growing literature on resource-base framework for analysis will be discussed as part of the firm's development of research for commercialisation. The results of a recent survey further shed light on the relationship between corporate financial management and allocated resources for research and development as the ''engine'' for new product development and therefore corporate market share and growth. The conclusion is that more financial mechanisms will be created and changed within US corporate systems to adjust, grow, and expand companies in the global economic arena, as the inevitable economic pattern leads to mergers, consolidations, and increasing cooperation and alliances among firms.

Accounting, Regulation and Profitability: The Case of PFI Hospital Refinancing

The refinancing of PFI (Private Finance Initiative) projects represents one of the most contentious aspects of Public Private Partnerships (PPPs) in the UK. The negative publicity associated with UK PFI refinancing deals is associated with several factors, including, evidence of massive private sector profit making, the failure of private sector financiers to share refinancing profits and, lastly, private sector frustration of adequate regulatory intervention in this area. Utilising a dynamic model of capital market and state interaction, this paper explains these outcomes as a function of effective private sector lobbying of bureaucratic state agencies to alter the structure of accounting, accountability and regulation with the goal of securing favourable profit and risk outcomes. These dynamics are illustrated with reference to the history of UK PFI refinancing and a case study of one of the projects where these gains reached extreme levels.

Risks and the financing of PPP: Perspectives from the financiers

Public private partnerships (PPP) are an established model for most governments internationally to provide infrastructure-based services, using private finance. Typically the public authority will sign a contract with a special purpose vehicle (SPV), which, because of the holistic nature of PPP, in turn sub-contracts the finance, design, construction, maintenance and soft services to companies that are often related to its shareholders. Thus there is a considerable network of linked organisations that together procure and provide the PPP project. While there is an increasing body of research that examines these PPP projects, much of it is interview or case study based so that the evidence is drawn from a small number of interviews or cases in specific sectors. It also focuses on the public sector procurer and the private sector contractor in the network of organisations. Although it has been recognised that the perceptions of the financiers may vary from those of other key PPP players there is much less research that focuses on the financiers. In this paper we report the results of a postal questionnaire survey, administered to 109 providers of senior debt and equity, from which the response rate was just less than 40%. We supplement these findings with a small number of illustrative quotes from interviewees, where the cited quote represents a commonly held view. We used SPSS and Nvivo to analyse the data. The findings show that when assessing PPPs financiers perceive a very wide range of risks as important, and that it is important to them that many of these risks are either insured or allocated to sub-contractors. When considering participating in PPPs, financiers agree that working with familiar partners on familiar projects and in familiar sectors is important, which may raise barriers to entry and undermine competitive processes.

Who Financed the Expansion of the Equity Market? Shareholder Clienteles in Victorian Britain

Who financed the great expansion of the Victorian equity market, and what attracted them to invest? Using data on 453 firm-years and over 172,000 shareholders, we find that the largest providers of capital were rentiers, men with no formal occupation who relied on investment income. We also see a substantial growth in women investors as time progressed. In terms of clientele effects, we find that rentiers invested in large firms, whilst businessmen were the venture capitalists of young, regional enterprises. Women and the middle classes preferred safe investments, whilst financiers and institutional investors were speculators in foreign companies. Our results may help to explain the growth of new types of assets catering for particular clienteles, and the development of managerial policies on dividends and share issues.