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Letter From The Editor-In-Chief, Allan Young

The Journal of Entrepreneurial Finance

With the present issue I've assumed the role of Editor-in-Chief of The Journal of Entrepreneurial Finance and Business Ventures, with my colleagues at the School of Management, Syracuse University, David Wilemon and Chunchi Wu carrying on as Editors. In addition, Yochanan Shachmurove, who was instrumental in helping us put together our two previous issues, joins our Board of Editorial Advisors, as do William J. Baumol, and Lawrence R. Klein. Reflecting the diversity of the field itself, the present issue of the Journal is charactericized by many different concerns and approaches to the area of entrepreneurship. Accordingly, in the first article, …

Risk, Return And Degree Of Owner Involvement In Privately Held Firms, Edward Vos, Bronwyn M. Smith

The Journal of Entrepreneurial Finance

Financial theory states that the variability of an asset’s return should be explained by the relative riskiness of that asset (Sharpe, 1964). This concept has been built around, and applied to, publicly-listed companies for which market information (which forms the basis of the risk and return measures) is easily visible and obtainable. Unfortunately, the fact that such information is rarely (if ever) available for small businesses, severely limits the usefulness of such a theory for privately-held enterprises. Therefore by using data from 100 small businesses and three measures of risk, this study provides empirical evidence that for small businesses, there …

A Simple Utility Approach To Private Equity Sales, Robert Dubil

The Journal of Entrepreneurial Finance

The paper examines the liquidity risk of a private equity firm that decides to dispose of a large holding in its portfolio. As the sale takes time, it requires a careful balancing act of the exposure to the fluctuations in the market value of the investment against the large sale-induced price depression. A mean-standard deviation utility framework is an appealing decision tool for optimizing protracted asset dispositions. The firm maximizes the expected profit from the sale strategy net of the price concession minus a penalty function for exposure to the price risk, with the penalty weight related to a loss …

Capital Budgeting And Entrepreneurial Organizations: A Survey Of Hospital Practices, Shih-Jen Kathy Ho, Lilian Chan, Daniel L. Tompkins

The Journal of Entrepreneurial Finance

Efficiency and effectiveness for all entrepreneurial firms requires that limited resources be put to their best use. Thus the acquisition of long-term assets is an important decision for any entrepreneurial firm. For hospitals, which have become entrepreneurial to survive in today’s health care environment, long-term asset investment decisions have become critical to their survival. The objective of this study is to increase health care organizations’ awareness of the important considerations in selecting and monitoring long-term investments. Our findings from a small sample of American hospitals indicate that payback method is the primary criterion for evaluating hospital’s long-term investment projects. Also …

Letter From The Guest Editors, Ali Fatemi And Harold Welsch, Ali Fatemi

The Journal of Entrepreneurial Finance

The 2003 meetings of the Academy of Entrepreneurial Finance Conference were held on the campus of DePaul University in Chicago, Illinois, April 30-May 2, 2003. The conference brought together a large number of academics, practitioners and policy makers from around the world. It accomplished its goal of bringing together those engaged in the scholarly investigation of entrepreneurial finance and practitioners and other professionals of the field. The conference provided for a forum to share the results of research, acquire state of the art information, and exchange ideas on a variety of topics. These included the entrepreneurial investment decision, the financing …

Is Entrepreneurship Only About Entering A New Business, Iraj J. Fooladi, Nargess K. Kayhani

The Journal of Entrepreneurial Finance

To most people entrepreneurship is solely about innovation and entering a new venture. For example, Hisrich and Peters (2002) define entrepreneurship as “the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.” According to Kuratko and Welsch (1994) “Many people now regard entrepreneurship as „pioneership? on the business frontier.” Bygrave (1994) begins with Schumpeter?s definition of an entrepreneur and continues to argue that only a few businesses would have the potential to fit Schumpeterian definition …

How Do Banks Pick Safer Ventures? A Theory Relating The Importance Of Risk Aversion And Collateral To Interest Margins And Credit Rationing, Andrew E. Burke, Aoife Hanley

The Journal of Entrepreneurial Finance

The paper augments the asymmetric information literature on bank lending to new ventures by focusing on the more neglected area of moral hazard; specifically the relationship between risk aversion, an entrepreneur?s wealth and the provision of collateral. The results highlight some interesting nuances which are not characteristic of the properties of models that have dominated the literature and which mainly focus on the problems of adverse selection. Contrary to models such as Evans and Jovanovic (1989) Blanchflower and Oswald (1998) our model shows that credit rationing does not necessarily have to be negatively related to an entrepreneur?s initial wealth. Our …

The Information Content In Trades Of Inactive Nasdaq Stocks, Peter Chen, Kasing Man, Chunchi Wu

The Journal of Entrepreneurial Finance

In this paper we analyze the frequency and information content of small Nasdaq stock trades and their impacts on return volatility at the intraday interval. We employ an autoregressive conditional duration (ACD) model to estimate the intensity of the arrival and information content of trades by accounting for the deterministic nature of intraday periodicity and irregular trading intervals in transaction data. We estimate and compare the price duration of thinly and heavily traded stocks to assess the differential information content of stock trades. We find that the number of transactions is negatively correlated with price duration or positively correlated with …

Patterns Of Venturing Financing: The Case Of Chinese Entrepreneurs, Jianwen Liao, Harold Welsch, David Pistrui

The Journal of Entrepreneurial Finance

This study examines the sources of venture financing of Chinese entrepreneurs in Wuhan, China. Based on a sample of 222, we found that Chinese entrepreneurs in Wuhan mainly rely on venture financing on their own or parties that are within their close social networks such as parents, relatives and friends. External financing sources are notably missing. We also found that entrepreneurs who use significantly more personal saving in venture financing are older (>37 years), female, with high school education or less, and have longer working experience. Entrepreneurs who are male with college or higher education, and who take time …

Characteristics Of Venture Capital Firms And Investment Appraisals: Australian Evidence, Alireza Tourani-Rad, Bryce England

The Journal of Entrepreneurial Finance

This study examines the characteristics of the venture capital industry in Australia. Our analysis is based on responses by thirty-two venture capitalist firms to a comprehensive questionnaire conducted in 2001. We observe that, on average, a venture capital firm has been operating for five years and consists of six investment executives with two specialist investment executives. Each firm has, on average, two formal layers in its investment decision-making process indicating two checkpoints to control risk. With respect to investment appraisal issues, it was noticed that the valuation methods based on discounted cash flows, recent transaction prices for acquisitions in the …

Entrepreneurial Failure And South Africa's Performance In The World Trading Environment, Mitchell Kellman, Trevor Roxo, Yochanan Shachmurove

The Journal of Entrepreneurial Finance

In the past four decades, Sub Sahara Africa has been notable in its relative development-performance failure. There exists a growing literature emphasizing the role of the entrepreneur as an essential element in economic development. We argue that the relatively sluggish growth observed in South Africa may be attributed, at least in part, to entrepreneurial failure. Emerging from its Apartheid era with a concomitant embargo on its trade, South Africa has been actively liberalizing its economy, positioning it for integration into the world trading system since the early 1990s. Following several decades of import-substituting efforts, this signals a clear shift toward …

Does Underwriter Reputation Affect The Performance Of Ipo Issues?, Junbo Wang, Sheen Liu, Chunchi Wu

The Journal of Entrepreneurial Finance

In this paper we examine the relationship between performance of the Chinese IPO firms and the reputation of investment bankers underwriting their stocks. Similar to previous studies on well-developed stock markets, we find that the initial return on the first day of trading is strongly positive for Chinese IPO stocks due to underpricing. This initial return is negatively related to the underwriter's reputation, suggesting that the better the reputation of the underwriter, the less underpricing and hence, the lower the initial return of the IPO stock. Extending the analysis to a ten-day window after the first trading day, we find …

The Effect Of The Issuer-Underwriter Relationship On Ipos: The Case Of An Emerging Market, Bengi Ertuna, Metin Ercan, Vedat Akgiray

The Journal of Entrepreneurial Finance

No abstract provided.

Collective Loans For Bulgaria's Self-Employed: A Field Study Of Social And Financial Capital On Enterprise Growth, Shad Morris

The Journal of Entrepreneurial Finance

The purpose of this paper is to increase understanding of how collective lending strategies leverage social capital to improve firm performance. Drawing on economic and sociological perspectives and fieldwork in Bulgaria, I argue that social capital may enhance the effects of financial capital on firm performance in microenterprises. Findings show that a collective lending strategy facilitates greater firm performance than individual lending--due partially to the increased social capital it creates for the entrepreneur. These findings come from a multi-method field study conducted in Bulgaria, where qualitative data were collected from over 40 business owner interviews. The findings have implications for …

Association Between Credit Rating Changes And High-Tech M&A In Taiwan, Jo-Hui Chen

The Journal of Entrepreneurial Finance

The primary purpose of this study is to examine the impact of high-tech and non-high-tech mergers and acquisitions (M&A) on the credit rating changes in Taiwan. We utilized the ordered probit model with random effect for the empirical works. A variety of econometric tests were conducted using pooled data of 101 firms in Taiwan over the period Sep. 1996 to Dec. 2001. This paper tries to examine whether the financial and strategy factors affect the credit risks. Our results indicate that Insider Ownership and Leverage Ratio are negatively related to credit rating changes, while Return on Equity and High-tech Firm …

Corporate Governance, Illiquidity, And Valuation Issues In Privately-Owned Corporations, Chenchuramaiah T. Bathala, Oswald D. Bowlin, William P. Dukes

The Journal of Entrepreneurial Finance

Investors in private corporations face unique problems relating to corporate control, illiquidity and valuation of securities. In this research, we survey a large sample of US corporations. Our sample includes both private and public firms. Major findings of our research are as follows: Private firms use written shareholder agreements for safeguarding ownership interests and dividend payments. Family owned firms dominate the ownership structure of private firms. Insiders of private firms own a much larger proportion of common stock than insiders in public firms, and the CEOs of private firms often happen to be the largest stockholders.

Forecasting Short Run Performance Of Initial Public Offerings In The Istanbul Stock Exchange, Ramazan Aktas, Mehmet Baha Karan, Kürsat Aydogan

The Journal of Entrepreneurial Finance

Previous research on IPOs has identified several factors or issue characteristics that play a role in the level of short term underpricing of initial public offerings. Some of those issue features are the firm size, market trend, size of the offer, investment banker reputation, method of intermediation, stock price range and investor type. The objective of this study is to develop a model based on these features to forecast the short term performance of IPOs in the Istanbul Stock Exchange. To this end we divided our sample period into a model building subperiod and a testing subperiod. After identifying 9 …

Dynamic Linkages Between Trading Volume And Price Movements: Evidence For Small Firm Stocks, Cetin Ciner

The Journal of Entrepreneurial Finance

Recent theoretical and empirical studies suggest that volume conveys useful information to forecast stock price movements. We investigate the information content of volume for the stock indices of small-capitalization firms in the US and France. Information asymmetry problems tend to be more important for small-capitalization firms and it can be argued that the information content of volume should be more significant. We find that volume does indeed forecast returns of the small-capitalization stock indices. We also detect a positive contemporaneous relation between volume and absolute value of returns. The findings are qualitatively the same for data from the US and …

Consumer-Based Taxation At The Business Level: The Croatian Experience, Helena Blazic, Nikša Nikolic, Mario Pecaric

The Journal of Entrepreneurial Finance

Croatia is the first country in the world to implement consumption-based direct taxation aimed at the individual as well as the business levels. Traditional corporate tax has been replaced by the so-called "interest-adjusted profit tax", which encompasses the corporate as well as the non-corporate sector. This paper analyzes the efficiency of this tax in Croatia with regard to its neutrality as well as its cost-effectiveness. This tax can be regarded as neutral in terms of investment, finance, inflation and organizational form. But the imperfections of financial markets in Croatia still cause distortions between debt and equity capital as well as …

Letter From The Editor, Allan Young

The Journal of Entrepreneurial Finance

No abstract provided.

Marshall V Madison: The Supreme Court And Original Intent, 1803-1835, Gordon Lloyd

School of Public Policy Working Papers

Should the justices of the Supreme Court rely on “original intent” as the foundation for constitutional interpretation? Or should they be free to interpret the Constitution in light of hermeneutical approaches created by current philosophies of law? This essay examines the Marshall Court to determine whether its opinions take their bearings from the American Founding or instead rely on a philosophy of jurisprudence that can be separated from the Founding. The purposes of this essay are fourfold: 1) to provide a comprehensive account of the use of the Framers by the Marshall Court, 2) address the normative question of the …

Volume 18, Number 3, Department Of Church Relations

Pacific Church News

Edited by Jerry Rushford

Spring 2003

60th Annual Pepperdine Bible Lectureship -- Embracing The Call Of God: Great Themes From Genesis (2003), Jerry Rushford

Pepperdine Bible Lectures: Programs

Program booklet for the 60th Annual Pepperdine Bible Lectures, held at Pepperdine University in Malibu, California, April 29 - May 2, 2003. The Pepperdine Bible Lectures is an annual event hosted by Pepperdine University featuring a wide variety of lectures and classes on topics and themes in the Bible and Christianity.

Jerry Rushford, Lectureship Director

Bill Henegar, Tali Barbarick, and Patty Atkisson, Lectures Team

White Flight? : George Pepperdine College's Move To Malibu, 1965-1972, Candace Denise Jones

Theses and Dissertations

George Pepperdine College, a Church of Christ affiliated institution of higher education in Los Angeles, California, had its foundation rocked in the 1960s by two events: The Watts Riots of 1965 and the 1969 shooting of Los Angeles youth, Larry Donnell Kimmons. These events challenged the original commitment that founder George Pepperdine had for the Los Angeles area and forever changed the future direction of George Pepperdine College (GPC). The Watts Riots served as the catalyst, generating a desire by the executive administrators of GPC to leave the perceived chaotic and unpredictable urban setting. The second event, the tragic shooting …