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- handle: 10670/1.l4zoby
- halshs: halshs-00676498
Mots-clés
Islamic Venture Capital Mudharabah Profit Sharing Ratio Adverse Selection Risk Aversion degree D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design G - Financial Economics/G.G2 - Financial Institutions and Services/G.G2.G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages G - Financial Economics/G.G2 - Financial Institutions and Services/G.G2.G23 - Non-bank Financial Institutions • Financial Instruments • Institutional Investors G - Financial Economics/G.G2 - Financial Institutions and Services/G.G2.G24 - Investment Banking • Venture Capital • Brokerage • Ratings and Ratings AgenciesSujets proches
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Kaouther Jouaber et al., « A Theory of Profit Sharing Ratio With Adverse Selection: The Case of Islamic Venture Capital », HAL-SHS : économie et finance, ID : 10670/1.l4zoby
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Résumé
This paper presents a theory for the Islamic venture capital named 'Mudharabah' under adverse selection problem. In order to avoid selecting a low type entrepreneur for a given good project, the framework defines the profit sharing ratio (PSR) as a screening device. We then develop a Profit Sharing Ratio model for Islamic venture capital and find the optimal PSR as function of the risk aversion degree of both the entrepreneur and the IVC (Islamic venture capitalist). We find that their respective risk aversion degree influences their decision to fix the PSR during the negotiation stage. We show that the high type entrepreneur will tolerate to the IVC a PSR which is higher than the PSR accepted by the low type.