The paper develops a simple theoretical framework in which the impact of different governance structures on management incentives, the efficiency of restructuring, and the social costs of the adjustment process in the transition period in Eastern Europe can be analyzed. The model shows that...

The paper develops a simple theoretical framework in which the impact of different governance structures on management incentives, the efficiency of restructuring, and the social costs of the adjustment process in the transition period in Eastern Europe can be analyzed. The model shows that...

We develop a model of successive oligopolies with endogenous entry, allowing for varying degrees of product differentiation and entry costs in both markets. We show that downstream conditions dominate the overall profitability of the two-tier structure while upstream conditions mainly affect the...

This paper investigates how multinational firms choose the capital structure of their foreign affiliates in response to political risk. We focus on two choice variables, the leverage and the ownership structure of the foreign affiliate, and we distinguish different types of political risk, such...

The privatization process in Eastern Europe has not been a success everywhere. The opinion or experts about the optimal privatization strategy has changed over the last decade. This article first presents the theoretical foundation for privatizing state-owned enterprises. It then discusses the...

We investigate how bank competition affects the efficiency of credit allocation, using a model of spatial competition. Our analysis shows that bad loans are more likely the larger the number of banks competing for customers. We study further how many banks will be active if market entry is not...

This paper studies the strategic interaction between a foreign direct investor and a host country. We analyze how the investor can use his control rights to protect his investment if he faces the risk of \"creeping expropriation\" once his investment is sunk. It is shown that this hold-up...

Previous empirical work on the link between domestic and foreigninvestment has provided mixed results. This may partly be due to thelevel of aggregation of the data. In this paper, we argue that theimpact of FDI on the domestic capital stock depends on the structure ofindustries. Using...

Starting with the international debt crisis in the 1980s, international barter increased substantially. More recently, barter has emerged in Russia and South East Asia. This paper examines how barter can help highly indebted countries to finance imports if they cannot use standard credit...