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In an overlapping generations economy, lenders fund risky investment projects of firms by drawing up loan contracts in the presence of an informational asymmetry. An optimal contract entails the issue of only debt, only equity, or a mix of the two. The equilibrium choice of contract depends on...
Persistent link: https://www.econbiz.de/10010296396
Persistent link: https://www.econbiz.de/10004978107
In an overlapping generations economy, lenders fund risky investment projects of firms by drawing up loan contracts in the presence of an informational asymmetry. An optimal contract entails the issue of only debt, only equity, or a mix of the two. The equilibrium choice of contract depends on...
Persistent link: https://www.econbiz.de/10011104972
There is a consensus that stronger property rights advance financial development. We provide evidence that the reverse hypothesis is also true. We isolate the structural component in the finance–property rights relationship using an instrument for financial development (private credit) based...
Persistent link: https://www.econbiz.de/10011005993
In an overlapping generations economy, lenders fund risky investment projects of firms by drawing up loan contracts in the presence of an informational asymmetry. An optimal contract entails the issue of only debt, only equity, or a mix of the two. The equilibrium choice of contract depends on...
Persistent link: https://www.econbiz.de/10005763437
In an overlapping generations economy households (lenders) fund risky investment projects of firms (borrowers) by drawing up loan contracts on the basis of asymmetric information. An optimal contract entails either the issue of only debt or the issue of both debt and equity according to whether...
Persistent link: https://www.econbiz.de/10005839170
This paper presents a dynamic general equilibrium analysis of public sector corruption and economic growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are charged with the responsibility for procuring public goods which contribute to...
Persistent link: https://www.econbiz.de/10005698039
This paper employs data on 119 countries for the period 1999/2000 to 2004/2005 to examine the impact of banking development on the size of shadow economies. The main results indicate that an improvement in the development of the banking sector is associated with a smaller shadow economy in a...
Persistent link: https://www.econbiz.de/10005260599
This paper aims to provide an explanation for the robust and consistent relationship between public investment in transport and communication and economic growth that has frequently surfaced in recent empirical studies. Using both informal and formal causality tests, the paper finds that, for a...
Persistent link: https://www.econbiz.de/10009351189
Theory is divided over the effects of corruption on economic growth. However, the growing consensus based on the empirical literature is that corruption is associated with negative growth outcomes. This relationship is not necessarily linear, and causality between corruption and economic growth...
Persistent link: https://www.econbiz.de/10009395641