We analyze the role of risk-sharing institutions in transitions to modern economies.Transitions requires individual-level risk-taking in pursuing productivity-enhancing activitiesincluding using and developing new knowledge. Individual-level, idiosyncratic risk implies thatdistinct risk-sharing...

In contrast to the very large literature on skill-biased technical change among workers, thereis hardly any work on the importance of skills for the entrepreneurs who employ thoseworkers, and in particular on their evolution over time. This paper proposes a simple theory ofskill-biased change in...

The financial crisis has re-ignited the fierce debate about the merits of financial globalizationand its implications for growth, especially for developing countries. The empirical literaturehas not been able to conclusively establish the presumed growth benefits of financialintegration. Indeed,...

There is a debate on whether executive pay reflects rent extraction due to “managerialpower” or is the result of arms-length bargaining in a principal-agent framework. In this paperwe offer a test of the managerial power hypothesis by empirically examining the CEOcompensation of U.S. public...

A model for matched data with two types of unobserved heterogeneity is considered – onerelated to the observation unit, the other to units to which the observation units are matched.One or both of the unobserved components are assumed to be random. This mixed modelallows identification of the...

This article puts the relationship between wage dispersion and firm productivity to an updatedtest, taking advantage of access to detailed Belgian linked employer-employee panel data.Controlling for simultaneity issues, time-invariant workplace characteristics and dynamics inthe adjustment...

The paper argues that networked firms are likely to have an advantage in securing externalfinance in countries with weak legal and judicial institutions since it helps financial institutionsto minimize the underlying agency costs of lending. An analysis of recent BEEPS data fromfifteen Central...

We discuss how the use of field experiments sheds light on long standing research questionsrelating to firm behavior. We present insights from two classes of experiments: within andacross firms, and draw common lessons from both sets. Field experiments within firmsgenerally aim to shed light on...

We provide the first econometric study of efficiency for a member of the Mondragon group ofworker cooperatives. Eroski is a retail distribution chain and, most unusually, there are twodistinct types of hypermarkets: (i) cooperatives with significant employee ownership andvoice; and (ii) GESPAs...

We empirically investigate the impact of incentive scheme structure on the degree ofcooperation in firms using a unique and representative data set. Combining employee surveydata with detailed firm level information on the relative importance of individual, team, andcompany performance for...