This paper develops a theory of the firm, and equilibrium credit rationing mechanisms in oligopoly with R&D-product market competition. Credit rationing arises from a hold-up problem between wealth-constrained entrepreneurs and external investors. Underinvestment occurs if entrepreneurial wealth...

We calculate the time series of the speed of convergence for 21 high-income countries over the period: 1953-1996, using low-pass filtered time series of per-capita GDP which are thus isolated from the influence of the short-run business cycle components. The observed patterns contradict the...

Interactions between economic development and financial development are studied by looking at the roles of financial institutions in selecting R&D projects (including for both imitation and innovation). Financial development is regarded as the evolution of the financing regimes. The...