A recent survey has shown that the major problem faced by firms in Latin American countries is difficulty in accessing financial markets. Figure 1 summarizes the findings of the Business Environment Survey on obstacles faced by firms.

It is well known that asset allocation policy is the major determinant of fundperformance. However, there is substantial disagreement about the exactmagnitude of the contribution of asset allocation. Following the approach inIbbotson and Kaplan (2000), we use German and Swiss balanced mutualfund...

Building on the ‘law and economics’ literature, this paper analyses corporategovernance implications of debt financing in an environment where a dominant owner isable to extract ex ante ‘private benefits of control’. Ownership concentration may result inlower efficiency, measured as a...

This chapter surveys theoretical research on the long-term performanceof xed-mix investment strategies. These self-nancing strategies rebalancethe portfolio over time so as to keep constant the proportionsof wealth invested in various assets. The main result is that wealthcan be grown from...

We develop a method that allows one to compute incomplete-market equilibria routinely forMarkovian equilibria (when they exist). The main difficulty to be overcome arises from the setof state variables. There are, of course, exogenous state variables driving the economy but, in anincomplete...

We develop a convenient structural framework for the joint model-ing of credit spreads, stock prices, stock options and basket creditderivatives, using a multivariate structural ¯rm value model withskewed asset returns. We show that our setting successfully addressesseveral empirical facts,...

In der Vergangenheit führte die Globalisierung und Öffnung der Finanzmärkte zu größerer Kapital- und Dienstleistungsfreiheit und zur De-Regulierung des Finanzsektors. In jüngster Zeit ist jedoch eine Trendumkehr von der De-Regulierung zur Re-Regulierung zu beobachten...

On financial markets many investment decisions are taken by groups and not by individuals. The evidence, however, whether groups better than individuals, is ambigous. We analyze the portfolios of groups and individuals in an asset allocation task on an experimental market. We find that groups on...

This paper analyzes the effects that uncertainty about economic fundamentalshas on aggregate trading volume. First, the trading volume of an investor facinga standard consumption portfolio choice problem is derived. It is found that if theparameters describing the investment opportunity set...

In this paper we show that reputation formation in endogenously formed relationships is a decisive determinant for the existence and performance of credit markets. In theabsence of any third party enforcement of debt repayment the contracting parties succeed in establishing stable bilateral...