An emerging new literature brings unique ideas from corporate finance to the study of international trade and investment. Insights about differences in the development of financial institutions across countries, the role of financial constraints, and the use of internal capital markets are...

We study how a mortgage reform that exogenously increased access to credit had an impact on entrepreneurship, using individual-level micro data from Denmark. The reform allows us to disentangle the role of credit access from wealth effects that typically confound analyses of the collateral...

This paper derives optimal labor taxation to finance student transfer if educational investments are subject to credit constraints. Credit constraints are endogenously determined under the incentive constraint that individuals cannot be better-off by defaulting. Student transfer alleviates...

Employment protection may affect both productivity and capital investment because higher adjustments costs hamper allocative efficiency and may therefore affect both the optimal capital labor input mix and total factor productivity. To estimate the impact of dismissal costs on capital deepening...

Banking competition may enhance or hinder the financing of small and medium-sized enterprises. Using a survey on the financing of such enterprises in China, combined with detailed bank branch information, we investigate how concentration in local banking market affects the availability of...

Building upon the social-risk management approach, this paper examines dimensions of household behavior that are important for risk management and reduction of vulnerability, beyond issues of consumption. This paper attempts to assess to what extent risk and vulnerability factors are relevant...

We study the role of household saving behaviour, of individual motives for saving and that of perceived liquidity constraints in 15 euro area countries. The empirical analysis is based on the Household Finance and Consumption Survey, a new harmonized data set collecting detailed information on...

We study the joint dynamics of foreign capital flows and real activity during the recent boom-bust cycle of the Spanish economy, using a three-country New Keynesian model with creditconstrained households and firms, a construction sector and a government. We estimate the model using...

Contractual arrangements in microfinance are designed to overcome the problems of adverse selection and moral hazard that are prevalent in developing and low income countries. Micro credit lenders use “innovative” lending methods such as group lending, contingent credit and use of collateral...

This paper investigates the effect that tight credit conditions had on outward foreign direct investment flows during the 2008-2010 global financial crisis. A difference-in-differences approach is used to isolate a "credit channel" impact of the global financial crisis on foreign direct...