This paper analyses the effect of bank profitability on economic growth. While policymakers have shown major concerns for low levels of bank profitability, there are no empirical studies on the growth effects of bank profitability. To fill this gap, we investigate the impact of bank...

Causality between the ratio of domestic private credit to GDP and growth in real GDP per capita is investigated in a country-by-country time-series framework for 24 OECD economies over the period 1980–2013. The proposed threefold methodology to test for causal linkages integrates (i)...

This paper shows that, counter to common perception, stock prices in China are strongly linked to firm fundamentals. Since the reforms of the early 2000s, stock prices are as informative about future profits as they are in the US. Although the market is segmented from international equity...

Causality between the ratio of domestic private credit to GDP and growth in real GDP per capita is investigated in a country-by-country time-series framework for 24 OECD economies over the period 1980–2013. The proposed threefold methodology to test for causal linkages integrates (i)...

A cornerstone of the Chinese growth model has been the opening up of its economy to private competition. Some observers claim that China has changed course since joining the WTO by increasingly promoting ‘state capitalism’, the large State Owned Enterprises, thereby compromising a growth...

Using firm-level data for 18 major global economies, we find that the exchange rate affects corpo-rate investment through a financial channel: exchange rate depreciation dampens corporate invest-ment through firm leverage and FX debt. These findings are consistent with the predictions of a...

Enterprise creation, destruction, and evolution support the transition to modern economic growth, yet these processes are poorly understood in industrializing contexts. We investigate Imperial Russia's industrial development at the firm-level by examining entry, exit, and persistence of...

To analyze whether the occurrence of elections affects access to credit for firms, we perform an investigation using firm-level data covering 44 developed and developing countries. The results show that elections impair access to credit. Specifically, firms are more credit-constrained in...

We introduce endogenous time preference via investment in patience (farsightedness) in an overlapping generations growth model to study development traps.There is no investment in patience, if the economy is very poor, while if it is wealthy enough there is always such investment.We explore the...

This paper investigates the importance of factor endowment vis-à-vis institutions in explaining the locational choice of foreign investors during the 1990s.Using dynamic panel estimation on data for transition economies, we find that low labour costs, bureaucratic efficiency ("institutions"),...