We propose corruption can substitute for conventional collateral in enforcing financial commitments when institutions are poor. A theoretical framework with agency frictions is built, in which corruptive relations with government officials keep firms committed to loan payments. Based on this...

This dissertation explores the interactions between resource reallocation, productivity dynamics and business cycles. A theory that combines two driving forces for resource reallocation, learning and creative destruction, is presented to reconcile several empirical findings of gross job flows....