We present a model of vertical product differentiation and exit where a domestic and a foreign firm face fixed setup costs and quality-dependent costs of production and compete in quality and price in the domestic market. Quality-dependent costs are quadratic in qualities, but independent of the...

Limited access of entrepreneurs to credit constrains the creation and growth of private firms. In Africa, access to credit is particularly limited for small and medium enterprises (SMEs) due to unclear property rights and the lack of assets that can be used as collateral. This paper presents a...

I perform Arellano-Bond GMM estimations using panel data over the period 1995-2008 and explore the growth effects of Africa's trade with China, distinguishing between the effect of imports and the effect of exports, and controlling for the role of export concentration. Four important results are...

This paper examines the impact of trade and political institutions on environmental quality in Africa and explores whether political institutions matter to the trade-environment relationship. We use data from a large group of African countries, covering the period 1990-2008 and two indicators of...

Using the Arellano-Bond dynamic panel GMM estimator, this paper explores the effects of aid, institutions, and social cohesion on per-capita income growth in 34 African countries, focusing in particular on the interplay of aid and institutions and the interplay of aid and social cohesion. The...

This paper re-examines the 'good policy environment' argument for aid effectiveness and allocation in Africa. It does so while controlling for the role of social cohesion and its interplay with aid. The empirical results indicate that once we account for the role of social cohesion the impact of...

We analyze the interplay of political elites’ de facto power, democracy and education based on a theoretical framework inspired by the model in Acemoglu and Robinson (2006). We identify conditions under which the elite may overcompensate the loss of de jure power (as a result of political...

This paper presents an empirical analysis of the controversial relationship between financial system development and economic development. Using cointegration and VAR estimations on annual data from Africa, we examine the nature of the relationship between financial development and income. We...

Since price discrimination and selling below cost arise in the normal course of business and are usually legal for home firms, countering these practices by foreign firms provides a very weak rationale for antidumping duties. If antidumping duties were to provide a systematic defense against...

Recent waves of corporate mergers followed by divestitures have sparked new interest in economic analyses of these issues. We take the merger paradox from the standard oligopoly literature as a starting point and show that in the absence of any cost-synergies of merger activities, firms do have...