We analyse investment behaviour of the population of medium and large industrial firms located in the Czech Republic in 1992–5. We examine the relevance of alternative models of investment and test if investment behaviour varies across ownership-legal form categories of firms. By using a large...

Recently, Blanchard and Kremer (BK) argued that disorganization has led to the output decline in the former Soviet Union. In this paper we introduce liquidity and credit constraints into the BK model and show how these problems can alleviate the hold-up problem. We argue further that barter...