A large body of evidence suggests that poor countries tend to invest less (have lower PPP adjusted investment rates) and to face higher relative prices of investment goods. It has been suggested that this happens either because these countries have lower TFP in the investment good producing...

Recent empirical evidence has suggested a positive association between various measures of investor protection and financial markets development, and between financial markets development and economic growth. We introduce investor protection in a simple extension of the two-period overlapping...

A large and increasing fraction of the value of executives compensation is accountedfor by security grants. It is often argued that the optimal compensation contracts characterized in the theoretical literature can be implemented by means of stock or option grants. However, in most cases the...

There is widespread evidence supporting the conjecture that borrowing constraints have important implications for firm growth and survival. In this paper we model a multi-period borrowing/lending relationship with asymmetric information. We show that borrowing constraints emerge as a featureof...

Recent years have witnessed a rapid accumulation of empirical evidence documenting firm dynamics around the IPO date. A particularly striking finding is that operating performance, as measured by Returns on Assets for example, peaks in the fiscal year preceding the offering, worsens on impact at...

A large body of evidence suggests that poor countries tend to invest less (have lower PPP-adjusted investment rates) and to face higher relative prices of in- vestment goods. It has been suggested that this happens either because these countries have lower TFP in the investment-good producing...

In this paper we provide a thorough characterization of the asset returns impliedby a simple general equilibrium production economy with convex investment adjustment costs. When households have Epstein Zin preferences, there exist plausible parameter values such that the model generates...