I develop and estimate an equilibrium model of the VC market to quantify distortions and explain cross-country differences in VC activity. The model maps directly to observable start-up funding histories and outcomes, facilitating estimation. For US start-ups first funded in 2005–2015, my estimates suggest that 40% shut down despite having positive continuation value; with continued funding, half would achieve a successful exit. In the UK, the model attributes the gap in activity to the US to financing conditions and acquisition opportunities, and counterfactuals suggest there may be gains to retargeting existing government support towards late-stage start-ups.

Discount rates are central to households’ investment, consumption and savings choices, and are a key determinant of aggregate spending and growth. We develop an empirical menu approach to identifying individuals' discount rates. In making credit choices, consumers are often faced with decisions consisting of maturity and interest rate choices. We show that using the structure of consumers’ preferences, consumers’ maturity choices are informative about their discount rates as more patient consumers pick longer-maturities with more favorable rates. We estimate discount rates using a financial choice which trades-off smaller cashflows in the short term against larger cash flows in the future—the choice of bank time deposits and 182,540 term choices made by 46,746 account holders at a large Indian bank. We estimate an average discount rate of 11.6% and exhibit significant heterogeneity. Estimated discount rates predict savings and portfolio choices, as well as stock market participation. Discount rates rise during economic contractions, consistent with Keynesian theory. Individuals with higher discount rates invest more in equities following monetary policy loosening, suggesting that discount rate heterogeneity can play a role in monetary policy passthrough.

Europe’s public equity markets have underperformed, new listings have declined, and an increasing number of firms are seeking listings in the United States. These developments have spurred debate on how to sustain local exchanges. We develop a theory of local stock markets to rationalize these trends and assess motives for policy intervention. In a two-country setting, firms choose entry and listing venues, and investors choose portfolios based on private signals whose precision depends on investor location and the firm’s listing decision. These choices jointly determine the information environment and asset prices in a noisy rational-expectations equilibrium. Our main result establishes that local stock markets rely on a sufficiently large effective investor base – the risk-adjusted size of local informed capital – and that a contraction in the effective investor base can trigger increased foreign listings and falling domestic activity. In addition, our model provides a theory of joint home bias, capturing the tendency of international listing decisions to reflect investor home bias.