We study the role of labour and credit market imperfections in the determination of equilibrium unemployment. In the credit market, loan contracts are negotiated between financiers and firms, both of which have bargaining power, while firms and organized labour bargain over the base wage. The...

Theoretical concepts and empirical tests in one area of economics and finance can provide insights into other areas far removed from the original area of inquiry. We show that efficiency wage theory (EWT) helps explain differences in commercial bank financial performance. EWT is a macroeconomic...

Key points:• This article considers how the recent market turmoil affected national banking systems, thereby prompting state measures;• It describes the remuneration problems shown by the financial crisis: rewards for failure; short-term behaviour; inappropriate design of performance...

We use firm-level data to study how local knowledge impacts the wage and profitability of commercial banks. Using a novel regulatory and competitive environment as a natural experiment, we find that restrictions on the mobility of local knowledge negatively impact the incidence of new bank...

It is well accepted that access to entrepreneurial finance encourages entrepreneurship and growth. Empirical studies on topic, however, segregate the effect of entrepreneurial finance on entrepreneurship by the source of capital. In this paper, we compare the effect of two main sources of...

How do we explain divergent trajectories of change in wage bargaining institutions? Existing studies maintained that European economic integration and liberalisation, decline in trade union power, changing work organization and new pay systems would push national wage-setting institutions...

Employment protection systems are known to generate significant distortions in firms? hiring and firing decisions. We know much less about the impact of these regulations on worker effort. The goal of this paper is to fill in this gap and in particular to assess whether the provision of...

The subprime crisis highlights how little we know about the governance of banks. This paper addresses a long-standing gap in the literature by analyzing board governance using a sample of banking firm data that spans forty years. We examine the relationship between board structure (size and...