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The majority of Roberto's research draws from economic theory to examine firms’ corporate activities (e.g., initial public offerings, relationships with venture capitalist firms, strategic alliances, M&A, etc.) and their performance implications. In particular, his work centers on how firms – especially entrepreneurial ventures – make investment decisions under conditions of asymmetric information and it explores whether signals coming from a firm’s stakeholders and institutional context might assuage the negative effects of adverse selection faced by prospective investors. For instance, if a new venture ties a relationship with a venture capital firm, the characteristics of this relationship, such as its timing, intensity and governance structure may generate information signals that will reduce the risk of mis-valuation by (1) potential partners in strategic alliances, (2) acquirers in M&A markets, and (3) the investment community in IPO markets. Thus, these information signals can help corporate exchanges to clear and allow the entrepreneurial cycle to unfold. In contrast, in the absence of information signals such as the ones listed above, markets may not clear and new ventures may not find appropriate channels through which to grow.

 

In his research Roberto has explored the problem of asymmetric information in several contexts and not necessarily limitedly to the entrepreneurship setting. For example, he has investigated these issues in the realm of cross-border investments by multinational firms and this research has resulted in a number of publications. However, the majority of his work has emphasized entrepreneurial firms, because the problem of adverse selection tends to be more prominent for them. In fact, new ventures have limited histories and their value is often tied to the figure of the entrepreneur or to a set of expectations, rather than hard assets that are in place. Thus, the valuation risk, as well as the risk of moral hazard borne by prospective investors is greater when the targeted investment is an entrepreneurial firm and it is paramount for research to study and understand the mechanisms that can help the market for entrepreneurial resources to clear.

 

Roberto's research tends to be applied and his work has often been rewritten for audiences of practitioners. For example, Roberto has published in the Financial Times, Forbes India and the Journal of Applied Corporate Finance.  It is increasingly important to him that his research have direct and tangible implications to entrepreneurs and managers and the research agenda laid out above shows a link between Roberto's academic work and its applications in the “real world”.

 

 

 

 

 

 

© Roberto Ragozzino 2016