I am doing a PhD in Finance at the University of Luxembourg.
I am on the academic job market 2026 — 2027.
My research interests: Quantitative corporate finance, Financial contracting with frictions, Financial intermediation, Executive compensation, Innovation.
Email: azamat.devonaev1@gmail.com
Wasted Ideas: Limited Diversification and the Rise of Intangibles
Job Market Paper*
Abstract
I study entrepreneurial investment when intangible capital is riskier than tangible capital. This risk arises, for example, from failed research and development or the departure of employees with specialized training. I develop a dynamic model in which entrepreneurs cannot fully diversify the risks associated with intangible capital, whereas tangible capital retains its value in all contingencies. Entrepreneurs therefore favor tangible capital partly as insurance against intangible capital risk. Less wealthy, undiversified entrepreneurs tilt their capital mix toward tangible assets, while wealthier entrepreneurs increasingly self-insure through cash holdings because of diminishing marginal returns to capital. I calibrate the model using a sample of U.S. firms. Relative to a benchmark with fully diversified entrepreneurs, limited diversification reduces the aggregate intangible-to-tangible capital ratio by 10%, intangible capital by 12%, and output by 6%. These shortfalls widen as production becomes more intensive in intangible inputs.
* (draft available upon request)
