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Project finance is analysed in three separate papers plus a survey. The survey highlights, inter alia, the recent development of multi-stage models with learning and reputation. The following two chapters develop models where projects involve a sequence of investments, while the final chapter is an empirical study. In Chapter Two an entrepreneur makes an initial investment and then faces an optimal stopping problem. It is socially optimal to terminate a high cost project when costs become known sufficiently early. But, due to past investments being sunk costs, there is a cut-off point after which completion of projects is always optimal. With asymmetric learning the entrepreneur may conceal bad state realisations from investors until after the cut-off date. The stopping problem is sometimes resolved by a loan commitment (a single-stage mechanism) and sometimes by convertible and redeemable Preference shares (a two-stage mechanism). In Chapter Three an entrepreneur begins with a project in the form of a call option with two periods to maturity. One period latter another project becomes available. Exercise decisions are observable but non-contractible and contracts to finance the second project cannot be written in advance of its arrival. With symmetric information about state realisations a simple rule for whether the two projects are best incorporated jointly as a single firm or separately as legally distinct firms is given. If joint incorporation is optimal, a contractual covenant to this effect may be required to overcome a time-inconsistency problem. With asymmetric information the exercise decision for the first project becomes a signalling game with a premature-investment pooling equilibrium. The time-inconsistency problem now becomes a useful device for eliminating the pooling equilibrium. The analysis implies that the covenants attached to financial contracts may differ according to whether information is symmetric or asymmetric. Finally, Chapter Four studies a unique sample of high growth entrepreneurial firms financed by 3i PLC. We characterise financing arrangements for these firms and discusses their relation with theories of optimal capital structure. Probit analysis is used to study the relation between collateral and risk. Contrary to the significant positive relation found by recent studies, we find no significant relation between collateral and risk.

Essay 1: Stage Financing and Syndication in Venture Capital Investment: The combined use of stage financing and syndication is one of the most remarkable characteristics of venture capital financing. In particular, the majority of later-stage venture capital investments rather than early-stage are syndicated. The paper presents a theoretical rationale for this financial arrangement. The model shows that tight control (i.e. efficient refinancing or continuation/liquidation decision) of the venture capitalist by stage financing can achieve ex-post efficiency but may disincentivize the entrepreneur's effort provision ex-ante. Hence, the project value is not maximized. I show that the combined use of later-stage syndication with stage financing is a mechanism that can realize the optimal tradeoff between high effort ex ante and efficient continuation ex post thus maximizing project value. The model offers testable empirical predictions. Essay 2: The Capital Structure of Private Equity-backed Firms: In this paper I study one fundamental tension between venture capitalist and management in private equity-backed firms and show capital structure (of private equity-back firms) is a mechanism to resolve the tension. The paper gives rationale for several financial arrangements in private equity investment. (1) Private equity deals are typically partially outside financed even though the private equity fund may not be financially constrained at the deal level. (2) The optimal security for outside financing is debt. (3) The maturity of outside security is long-term. The insight of the paper has applications outside of private equity. Essay 3: Market Transparency and the Accounting Regime: We model the interaction of financial market transparency and different accounting regimes. This paper provides a theoretical rationale for the recently proposed shift in accounting standards from historic cost accounting to marking to market. The paper shows that marking to market can provide investors with an early warning mechanism while historical cost gives management a "veil" under which they can potentially mask a firm's true economic performance. The model provides new explanations for several empirical findings and has some novel implications. We show that greater opacity in financial markets leads to more frequent and more severe crashes in asset prices (under a historic-cost-accounting regime). Moreover, our model indicates that historic cost accounting can make the financial market more rather than less volatile, which runs counter to conventional wisdom. The mechanism shown in the model also sheds light on the cause of many financial scandals in recent years.

This thesis investigates the financing and organisation of innovative firms and consists of three substantive chapters. Chapter 2 analyses the optimal financing arrangement when weak property rights allow an investor to transfer one entrepreneur's knowledge to another of his portfolio entrepreneurs. It shows that the optimal contract induces disclosure if and only if it is socially efficient. Next, it analyses the impact of the strength of property rights on project surplus and argues that this relationship may be non-monotonic. In particular, the expected value of risky projects may be negatively related to stronger property rights. Two extensions consider the impact of the investor's disclosure threat on the closeness of the financing relationship as well as the optimal size of the investor's portfolio. Chapter 3 argues that a commitment to 'shallow pockets', namely by limiting the size of funds raised initially, may improve an investor's ability to deal with entrepreneurial agency problems. Shallow pockets allow the investor to create competition for continuation finance between her portfolio entrepreneurs. Although this increases the investor's ex post bargaining power vis-a-vis entrepreneurs financed by her, we show that it can nevertheless improve ex ante effort incentives as well as allow sorting across entrepreneurial types, when neither of which can be achieved through contractual means. Chapter 4 considers two agents who form a research partnership and derives the optimal communication policy within the partnership. Although communication by an agent reduces her bargaining power during interim renegotiations, it may nevertheless increase expected returns to the agent if it increases her partner's research incentives. This will be the case if the two agents' research paths are sufficiently complementary. As a result, chapter 4 suggests a role for communication in the absence of spillovers considered in the existing literature.

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This study examines 446 reports (223 annual reports and 223 stand-alone reports) of 46 FTSE100 companies for 2000-2005 inclusive. The selected companies are those that produced stand-alone reports in the form of a hardcopy for a minimum of three consecutive years ended 2005. This study analysed the total pages of the reports and the results show that the length of annual reports and stand-alone reports has increased over the years. The analyses of photographs, graphs and tables presented in those two types of reports show that tables and photographs are the most popular presentation format in the annual reports and stand-alone reports, respectively. Also, this study found that graphs and tables are the least popular presentation format in annual reports and stand-alone reports, respectively. There are more photographs of men, rather than photographs of women, presented in these two types of reports. Based on Signalling Theory, the companies, via photograph presentations, are argued to communicate a signal of power, rationality, emotional stability, aggressiveness, self-reliance, objectivity, and vigour, which attributes are commonly associated with men. Also, there are more, rather than less, portrait photographs presented in annual reports than in stand-alone reports to convince the readers of the truthful of information that the companies are presenting. Further, the companies are found to have used photograph presentations for impression management by way of presenting more images of humans at a workplace, rather than humans not at a workplace, in photographs presented in annual reports and stand-alone reports. Impression management also was detected on the presentation of graphs, tables and texts presented in stand-alone reports. Overall, size, activity, and listing status, but not performance, have been found to influence to a certain extent, on the number of photographs, graphs and tables presented in annual reports and stand alone reports.

In todays highly uncertain, turbulent world, we argue that traditional risk management methods are inadequate when managing operational risk within the Telecomms industry. Current estimates suggest that the impact of operational risk cost the industry $100-200 Billion per annum. In this thesis we attempt to bring theory and practice together in meeting the contemporary challenge of managing risk in dynamic, turbulent and highly uncertain environments. Through a multimethod research strategy involving an in depth case study, qualitative interviews with leading telecomms risk consultants and surveys of senior/ line managers and risk professionals from 100 telecomms organizations spread over 40 countries worldwide, this empirical study investigates the determinants of risk method with reference to contingency theory (external and internal environmental and decision maker factors), the combined code and Turnbull recommendations, as set out by the Institute of Chartered Accountants of England and Wales, addressing risk management as a part of corporate governance and new participatory risk theory. Throughout this thesis we will argue that telecomms risk and uncertainty poses crucial problems for policy makers and that there is now a need to examine critically how we manage such problems. Real world risk decision-making is described and evaluated against normative, ideal world decision frameworks and the quality of risk decision-making found lacking through poor judgement In telecomms we observe decentralization and deformalization as companies pursue flexible organizational forms that conclude in many cases with a control vacuum. This absence of control manifests itself in worried risk specialists uneasy about participatory risk methods. An informal risk control strategy is synthesised and described from control theory and a case study presented. This new strategy is offered as a means to fill vacuums in a manner congruent with the needs for both flexibility and control Finally we conclude that risk method must adopt a more subjective, constructionist perspective in the present telecomms environment and controls must support multiple needs of flexibility, empowerment, creativity, and timely responsive corrective action.