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• Working Paper | 2019

  Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability

  Ernest Liu and Benjamin N. Roth

  Microcredit and other forms of small-scale finance have failed to catalyze entrepreneurship in developing countries. In these credit markets, borrowers and lenders often bargain over not only the division of surplus but also contractual flexibility. We show these lending relationships may lead to endogenous poverty traps for poor borrowers if future income is not pledgeable, yet richer borrowers unambiguously benefit. Improving the bargaining position of rich borrowers can harm poor borrowers, as the lender tightens restrictions and prevents them from growing. The theory rationalizes the low average impact and low demand of microfinance despite its high impact on larger businesses.

  Keywords: Entrepreneurship; Developing Countries and Economies; Microfinance; Problems and Challenges;

  Citation:

  Liu, Ernest, and Benjamin N. Roth. "Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability." Working Paper, March 2019.  View Details

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• Course Overview Note | January 2011 (Revised April 2019)

  The Coming of Managerial Capitalism: Overview

  Tom Nicholas

  This is a course overview note for The Coming of Managerial Capitalism. CMC is chronologically organized. It starts in the late eighteenth century when America gained independence, spans the remarkable rise to industrial maturity during the nineteenth and twentieth centuries and ends at the crossroads at which the United States currently stands. There are four modules: 1) THE HISTORICAL FOUNDATIONS OF ENTREPRENEURSHIP 2) THE EMERGENCE OF ORGANIZATION 3) PROSPERITY, DEPRESSION AND WAR 4) TECHNOLOGICAL AND FINANCIAL REVOLUTIONS. Each covers a distinct period in business history but the themes overlap and these themes are collectively analyzed in a concluding session LESSONS FROM THE PAST. CMC is motivated by the idea that effective decision making in the current business environment crucially relies on a comprehensive appreciation of how things worked—or didn't work—in the past.

  Keywords: Business History; Business or Company Management; Entrepreneurship; Business Startups; Welfare or Wellbeing; War; Transformation; Technology; Finance; Situation or Environment; Decision Making; Management Analysis, Tools, and Techniques; United States;

  Citation:

  Nicholas, Tom. "The Coming of Managerial Capitalism: Overview." Harvard Business School Course Overview Note 811-033, January 2011. (Revised April 2019.)  View Details

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• Technical Note | HBS Case Collection | November 2018 (Revised March 2019)

  Initial Coin Offerings in 2018

  Jeffrey J. Bussgang, Ramana Nanda, Robert F. White and Nathaniel Schwalb

  In 2018, Initial Coin Offerings (ICOs) were an emerging fundraising method for blockchain-based projects. As the ecosystem grew, there were many open questions on regulation, pricing, and even which projects were a good fit for blockchain. However, there was already some emerging consensus on the benefits and challenges of building with blockchain and emerging best practices for Initial Coin Offerings.

  Keywords: Blockchain; Initial Coin Offerings; ICO; Decentralization; networks; Protocols; Entrepreneurship; Project Finance;

  Citation:

  Bussgang, Jeffrey J., Ramana Nanda, Robert F. White, and Nathaniel Schwalb. "Initial Coin Offerings in 2018." Harvard Business School Technical Note 819-057, November 2018. (Revised March 2019.)  View Details

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