External finance

Learner and Tsai (2000) also consider the nature of biotechnology alliances and how they are influenced by whether or not they were formed in periods of sufficient external financing. They report that when external financing was more readily available, control was more frequently maintained by the smaller biotechnology company then when external financing was more limited. 

External financing (loans from hanks or other concerns, issue of stocks and bonds)... 

A comparison of interest or dividend rates for different types of externally financed capital is presented in Table 10. 

When a certain number of laboratories work in the same area, cooperation and inter-laboratory comparisons can be arranged. The coordination of such activities is an extra economic burden. In order to speed up the process, external financing is needed. 

Equation (2.1) shows an incentive for shareholders to substitute equity by debt to increase the company s value As interest on debt often is less than interest on equity, the substitution of equity by debt reduces the discount rate of the cash flows. Additionally, debt has a tax advantage unlike dividends expenses on debt diminish income. Moreover, external financing through a rights issue can be interpreted as a signal that management considers the share price as overvalued. In most cases the share price drops after the announcement of a rights issue. ... 

For established companies, with established credit records, low credit risk and run by experienced management, capital markets are the most likely source of external finance. However, capital markets did not play a major role in raising capital for industrialization, except to a certain extent in the US (Lazonick and O Sullivan, 1997a, 1997b). Capital markets were used particularly to transfer ownership of corporate entities from family-run or close-knit ownership structures to publicly quoted companies, rather than to raise finance for industrialization. 

Of particular danger for countries under the influence of the WB and IMF is the external funding of the import of cheep goods (a form of dumping). For instance, in Zambia, the opening up of the domestic market to textile import led to the collapse of the domestic textile sector with the closure of the majority of textile factories and the ensuing unemployment, closure of schools, reduced finance for the health service and... 

A major part of the early stages of any investment project will involve the raising of the necessary finance for it, from internal or external sources, and at the lowest cost. A correspondingly important part of the appraisal process is therefore to examine the various sources of funds, and to try to put some relative value or cost on them. 

Tsutomu Une, Sr. Exec. Officer-Global Corp. Strategy Yoshikazu Takano, Sr. Exec. Officer-External Affairs Manabu Sakai, Exec. Officer-Global Corp. Finance Joji Nakayama, Exec. VP/Pres., Japanese Oper. 

Corporate venture funds are venture capital funds financed pardy or entirely by industrial companies. They are ideally managed using the same financial criteria as venture capitalists would apply but, in addition, they have a strong relationship with their industrial investors. The startups funded then benefit from the investors industry knowledge, while the industrial investors not only receive a financial return but also better information from the market to use in external and internal investment decisions. They can provide access to new technologies and allow companies to build an external network by, for example, cooperating with a number of different startups. This has given some corporations access to important deals in return for a relatively small investment. 

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