We survey several key mechanisms that explain the composition of international capital flows: foreign direct investment, foreign portfolio investment and debt flows (bank loans and bonds). In particular, we focus on the following market frictions: asymmetric information in capital markets and...

In his seminal 1970 article on lemon markets, George Akerlof posited the possibility of market failure in the presence of asymmetric information regarding a good’s value. In the intervening four decades, the importance of accurate valuation information has grown as transnational trade has...

In the present paper an empirical analysis with a panel data econometric model will point out that R&D, government spending on education as well as trade unions are the most important factors for the labor productivity determination. The sample examined covers many Western European countries....

We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between...

We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between...

We design a performance-on-structure experiment, where performance is measured by innovation outcomes and structure is defined as corporate investment policy, specifically, how firms acquire, assess, and retain human capital. We use patents, patents normalized by R&D intensity, patent citations,...

Before 2004, by sourcing skilled labor in the international labor market, large, innovative U.S. firms effectively utilized an alternative to investing in the existing human capital stock of these firms. After the immigration policy shock of 2004, when new skilled immigrant hiring became...

We consider Roy's economies with perfectly competitive labor markets and asymmetric information. Firms choose their investments in physical capital before observing the characteristics of the labor markets they will face. We provide conditions under which equilibrium allocations are constrained...

A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates' productivity. I model various distinct sources of signal imperfection - such as noise and multi-dimensional types - and characterize their implications for the private return to skill...