Assistant Professor Jan Bena is analyzing the methods firms employ to raise capital and how these methods affect the creation of new businesses.
Bena believes we need to know how finance affects long-term economic development that in turn determines how well-off we will be in the future.
For example, in most instances new firms, as stand-alone entities, may have difficulty raising money so they may consider looking to established firms for financial assistance. This method of obtaining financing seems particularly prevalent in Europe as a significant number of new ventures in that part of the world emerge as appendages of established corporations.
In the US, however, this method of financing is not as widespread as new enterprises tend to emerge independent of existing businesses.
This difference in approach may be due to cultural norms. For example, the strong belief in the rugged individualist - so prevalent in North America - may not be as important to Europeans.
The results of Bena's research suggest investors would be well advised to take into consideration these cultural differences when assessing what method of investment would be most desirable and in what environment.
Learn more about Assistant Professor Bena's latest research.