Tamir Agmon

University of Gothenburg, Goeteborg, Västra Götaland, Sweden

Are you Tamir Agmon?

Claim your profile

Publications (14)4.31 Total impact

  • Tamir Agmon, Ido Kallir
    [Show abstract] [Hide abstract]
    ABSTRACT: For many years accounting was based on historical data while finance was based on expected future data. This difference creates a gap between accounting and finance regarding issues like the values of assets held by companies and liabilities, including equity, issued by them. IFRS in general and the fair value measurement as introduced by IAS in the last few years brings accounting and finance together. In this study we present, discuss and test a measurement instrument called Value Based balance Sheet (VBB). The VBB rests on three major propositions in accounting and finance; first, the accounting paradigm that describes a firm by its assets and liabilities and defines the identity between them. Second, the finance valuation model that defines the value of a firm as the discounted risk adjusted cash flows to be generated by the firm, and then allocate the actual cash flows over time to different claimants. The third proposition has two parts; in a complete and perfect market the value of the firm is independent of its capital structure, in an incomplete market with monopolistic competition the risk profile of the liabilities should be congruent with the risk profile of the assets. Ex ante Incongruence between the risk profile of the liabilities and the assets will reduce the value of the firm. The VBB focuses on the third proposition, but it also reflects the first two propositions. The VBB differs from other valuation instruments like Economic Value Added (EVA) in looking at both the assets and the liabilities of the firm and the relationships between them. We test the VBB as a way to gain better insights into the development of value over time. We do that by using a unique data set of venture capital backed (VC) young innovative companies in the software industry. The test shows that the VBB is an effective way to trace and better understand the dynamics of the value of these firms.
    09/2012;
  • Source
    Tamir Agmon, Avi Messica
    [Show abstract] [Hide abstract]
    ABSTRACT: • One major change in the world of international business and finance is the growing role of private equity investments in firms in emerging markets. In little more then four years, since 2003, the money raised by international, primarily American private equity funds for investment in emerging markets went up about ten times, from 3.5B to3.5B to 35B. • This paper provides a multidimensional analysis and discussion on the role of private equity funds in the globalization process of firms from emerging markets. The discussion begins with development economics, focusing on financial markets development and sector specific capital, proceeds to a discussion of local comparative advantage and intangible trade costs in the process of globalization, and continues with a discussion of imperfect contracts and financial contracting based on recent research in financial economics. • The multidimensional character of the research is congruent with the nature of globalization and international business. Investment of private equity funds in emerging markets is shown as a new form of foreign direct investment dubbed FFDI (financial foreign direct investment).
    Management International Review 01/2009; 49(1):11-26. · 0.75 Impact Factor
  • Source
    Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: The changes in globalization and in the world of international business make it necessary to rethink the basic model of the economics of international business. For most of the 2nd half of the 20th centuryinternational business was about how large companies in the developed countries increase their valuevia international business activities. Not surprisingly the research in the economics of international business from Caves, Kindleberger, and Hymer to Buckley and Casson, Dunning, and many others was based on models of industrial organization. The world has changed and international business has become a two-way street where firms and governments from emerging markets and small countries are as active as the developed countries MNEs and their governments. In this paper the basic international trade model is used to gain insights of the new world of international business. In particular, a dynamic model of changing factor intensity and of creating local specific competitive and comparative advantages for firms and governments from emerging markets is presented and discussed.
    William Davidson Institute at the University of Michigan, William Davidson Institute Working Papers Series. 01/2009;
  • Avi Messica, Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: The high technology (hi-tech) sector has become an important factor for economic growth in many countries. Israel is an extreme case where most of the production of the hi-tech sector is exported, and moreover, comprises more than half of its industrial exports. In this study, we focused on the optimal funding of the public sector for the hi-tech industry in the presence of short-term, cyclical, venture capital funding. We addressed the first issue by constructing a decision-making model that results in the optimal governmental support for the hi-tech sector. For the latter issue, we constructed a model that accounts for the dynamics of the venture capital (VC) industry over 1995-2005. Our findings indicate that the VC industry is highly correlated with the NASDAQ composite stock index and that it is a supply-driven market. The optimal public sector's policy for funding the hi-tech sector should be anti-cyclical, dynamic and conditioned on the VC investments as well as on the specific sector that is supported. The models and their validation against empirical data are presented and discussed as well as the practical implications for policy and decision-makers.
    International Journal of Entrepreneurship and Innovation Management - Int J Enterpren Innovat Manag. 01/2009; 10.
  • Tamir Agmon, Avi Messica
    [Show abstract] [Hide abstract]
    ABSTRACT: The rapid development of a new comparative advantage in the hi-tech sector in Israel in the period 1995-2005 provides an example of a new form of foreign direct investment (FDI). Unlike traditional FDI, this new form of international investment, that we dubbed financial foreign direct investment (FFDI), involves capital flows from developed countries to small countries and to the emerging markets. The providers of this capital, defined in our study as “sector-specific capital”, are financial and risk intermediaries like venture capital funds and private equity funds. Like multinational enterprises they transfer factors of production across borders seeking to maximize their value. In doing so, they are a part of a process of generating new comparative advantages. We focus on the case of Israel and show that, due to the inherent asymmetry, it takes government action to trigger the process of importing sector-specific capital to Israel primarily from the US capital market, but once the process has begun, it has led to economic growth via reducing tangible and intangible trade costs, creating trust and thus generating competitive advantage for innovative technology firms from Israel in the global markets.
    Contributions to Political Economy 04/2008; 27(1):57-72.
  • Source
    AVI MESSICA, TAMIR AGMON
    [Show abstract] [Hide abstract]
    ABSTRACT: We studied the optimal funding of the public sector for the Hi-Tech industry in the presence of short-term, cyclical, venture capital (VC) funding by constructing a decision-making model that results in the optimal governmental support and a model that accounts for the dynamics of the VC industry. We found that the VC industry is highly correlated with the NASDAQ stock index and that the optimal public policy for funding the Hi-Tech sector should be anti-cyclical, dynamic, and conditioned on the VC investments. The models and their validation are discussed as well as the practical implications for policy and decision makers.
    International Journal of Innovation and Technology Management 01/2008; 05(01):105-122.
  • Avi Messica, Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: We studied the prerequisites of public policy for technology innovation, especially in small- and medium size countries (but not limited to), by analysing the Israeli High-Technology (Hi-Tech) experience over the past 15 years and by interviews with local industry professionals and entrepreneurs as well as from a variety of data sources. We find that the prerequisites for the formation of a viable Hi-Tech sector comprise the following major components: creating or leveraging on a local comparative advantage at the firm or sub-sector level, importing professional high-risk capital and reducing tangible and intangible international trade costs by forming a suitable habitat, infrastructure-wise. We recommend focusing first on the investors rather than on the entrepreneurs. We argue that the Israeli experience is valid for regions and countries that are interested in setting up or strengthening their innovative Hi-Tech sector.
    Int. J. of Foresight and Innovation Policy. 01/2008; 4(3/4):307 - 320.
  • Source
    Avi Messica, Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: This report discusses the prerequisites for growth through the formation or the strengthening of innovative high technology sector, especially in small to medium size countries. It is based on analysis of the Israeli Hi-Tech experience over the past fifteen years and by interviews with local industry professionals and entrepreneurs as well as variety of data sources. Emphasis was put on strategic aspects and system level considerations for public policy makers. We find that the prerequisites for viable and flourishing high technology sector comprise of the following major components: creating or leveraging on a local comparative advantage at the firm or sector level, the availability of professional high-risk capital, and reduced tangible and intangible international trade costs by forming a suitable habitat, infrastructure-wise. We recommend focusing first on the investors rather than on the entrepreneurs. We argue that the Israeli experience is valid for countries that are interested in setting up or strengthening their innovative high technology sector. The findings and conclusions are in some contradiction to the policies that are currently practiced by some of the governments and regional organizations around the world.
    International Journal of Foresight and Innovation Policy 03/2007;
  • Avi Messica, Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: This research focused on the US venture capital (VC) industry over the period of 1980 to 2006. We found that supply and demand shifts occurred in the US VC during that period. Moreover, the US VC industry has gone under fundamental transformation in the early 1990s when pension funds started to invest in the sector. As a result, the US VC industry has transformed into a supply-driven market. We estimate that the VC industry is still inflated and predict degraded future returns if the current trend of institutional investors to further increase their allocation for venture capital investments continues.
    International Journal of Technoentrepreneurship 01/2007; 1(2).
  • Tamir Agmon
    Journal of International Business Studies 02/2006; 37(5):575-577. · 3.56 Impact Factor
  • Source
    Tamir Agmon, Avi Messica
    [Show abstract] [Hide abstract]
    ABSTRACT: We derive a diffusive stochastic differential equation that describes the dynamics of the venture capital (VC) industry and use it to study two related issues that are concerned with the evolution of the venture capital and the high technology sectors over time. First, the short-term cyclical behavior of the venture capital industry is discussed. Then, we deal with the optimal funding of the public sector for supporting the high technology sector. We address the first issue via a differential equation. For the latter issue, we construct a decision-making model that yields the optimal funding of the public sector for the high technology sector. Our findings indicate that the VC industry is highly correlated with the US capital markets. Hence, the NASDAQ composite stock index can be used for the estimation of the evolution of the venture capital industry with respect to the relevant industry-related variables such as fundraising, the average deal size, the total number of investments and the like. In general, the optimal funding policy of the public sector is shown to be anti-cyclical with the VC funding. Namely, it should be a dynamic funding policy that is conditioned on VC investments and on the specific industrial sector that is supported. For example, the public sector's support for fast maturing sectors like software and information technology should be different than that of slow maturing sectors like pharmaceuticals and biotechnology.
    01/2006;
  • Source
    Avi Messica, Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: We hypothesize that supply and demand shifts occurred in the US venture capital (VC) industry during 1980 to 2002 and present the results of an empirical study about the temporal characteristics of the industry during that period. Our main conclusion is that the VC industry has gone under fundamental transformation in the early 1990s when pension funds started to significantly invest in the sector. As a result, since the early 1990s, the US VC industry has transformed into a supply-driven market. We estimate that even after the bubble burst, the VC industry is still inflated and predict degraded future returns. Moreover, we project that if pension funds, such as CALPERS and the like, and other institutional investors will further increase their allocation for venture capital investments it will turn out counterproductive and further degrade the performance of the VC industry in view of the limited pool of fundable deals.
    01/2006;
  • Source
    Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: Much of the discussion in economics is concerned with growth. Economic growth can be discussed and measured in terms of a national state. It can be also discussed and measured in terms of a corporation, (often using the term value rather than growth). Development Economics is concerned with growth of countries run by governments; International Business is concerned with the behavior and the value of multinational enterprises run by management. This paper is about the interface between the two. The vehicle used in this paper to explore the interface is a comparative analysis between two very influential books; "The Strategy of development" by Hirschman, (1958), and the "Future of the Multinational Enterprise" by Buckley and Casson, (1976). The main argument of the paper is that Development Economics and International Business do approach a very similar issue, but they do it from two different dimensions perpendicular to each other. Looking at the whole picture, (the matrix as a whole rather than along the two separate vectors), gives the observer a more meaningful picture. This is done in the paper through a critical comparison of the two texts focusing on the two dimensions on internalization, growth and internalization, investment choices and strategies, and multinational enterprises and the dynamics of development.
    11/2004;
  • Source
    Tamir Agmon
    [Show abstract] [Hide abstract]
    ABSTRACT: The comparative advantage of a country is determined by its factor intensity. In many cases factors of production can be accumulated over time and thus effect a change in the comparative advantage of a given country. The changes in the accumulation of factors can be a policy decision, or it can arise from other economic developments. The change in the comparative advantage of Israel in the last decade of the 20th century where the country has become a center for innovative new technology was affected by the globalization of the US capital market and the ability of Israeli companies and service organization to build an informational infrastructure that has made it possible to import high-risk specific sector capital to Israel. Importing this type of capital has completed the already existing human capital and makes a potential, hidden, advantage into a business reality. The Israeli experience is evidence to the contribution of international capital movements to economic growth of a small country. It also shows the relations between the international finance model of capital movements and the development economics case for the changing pattern of the comparative advantages of small countries, and the contribution of the capital markets to the process.
    William Davidson Institute at the University of Michigan, William Davidson Institute Working Papers Series. 01/2004;