蝌蚪网

This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. 蝌蚪网
  3. 蝌蚪网 Review
  4. June 2010
  5. Technology Adoption with Exit in Imperfectly Informed Equity Markets

蝌蚪网 Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Technology Adoption with Exit in Imperfectly Informed Equity Markets

  • Katrin Tinn
蝌蚪网 Review
vol. 100, no. 3, June 2010
(pp. 925–57)
Download Full Text PDF

Abstract

This paper focuses on the importance of equity markets in facilitating the exit of entrepreneurs investing in technology. Entrepreneurs' willingness to invest and aggregate output is affected in two opposite ways. First, uncertainty about equity price or lack of market liquidity discourages technology adoption. This can explain slow technology adoption and limited participation by venture capitalists in underdeveloped equity markets. Second, fast adoption is a positive signal to imperfectly informed equity market participants. This provides a rational explanation for overpricing technology stocks and overinvestment in developed markets. Fast adoption is most probable at an intermediate quality of information. (JEL D82, E23, G12, G31, G32, O33)

Citation

Tinn, Katrin. 2010. "Technology Adoption with Exit in Imperfectly Informed Equity Markets." 蝌蚪网 Review 100 (3): 925–57. DOI: 10.1257/aer.100.3.925

JEL Classification

  • D82 Asymmetric and Private Information
  • E23 Macroeconomics: Production
  • G12 Asset Pricing; Trading volume; Bond Interest Rates
  • G31 Capital Budgeting; Fixed Investment and Inventory Studies
  • G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
  • O33 Technological Change: Choices and Consequences; Diffusion Processes