This paper studies the impact of cross-country variation in financial market development on firms' financing choices and growth rates using comprehensive firm-level datasets. We document that in less financially developed economies, small firms grow faster and have lower debt to asset ratios...

show that financial development can rationalize the difference in growth rates between firms of different sizes across countries.

The recent financial crisis has been accompanied by severe contractions in economic activity and credit as well as unprecedented levels of uncertainty. This project constructs a quantitative model with default risk where an increase in dispersion leads firms to contract the size of their...

financial crisis. This paper develops a model of world trade and financial frictions to gain insights into the mechanisms by which a deterioration in financial conditions interact with countries' exports and imports. We extend the international business cycle model to a model of a continuum of...

Using comprehensive firm-level datasets, this paper studies the impact of cross-country variation in financial market development on firms' financing choices and growth. In less financially developed economies, small firms grow faster and have lower leverage than large firms. As financial...

During the recent U.S. financial crisis, the large decline in economic activity and credit was accompanied by a large increase in the dispersion of growth rates across firms. However, even though aggregate labor and output fell sharply during this period, labor productivity did not. These...

We develop a multicountry model in which default in one country triggers default in other countries. Countries are linked to one another by borrowing from and renegotiating with common lenders with concave payoffs. A foreign default increases incentives to default at home because it makes new...

This paper studies an optimal renegotiation protocol designed by a benevolent planner when two countries renegotiate with the same lender. The solution calls for recoveries that induce each country to default or repay, trading off the deadweight costs and the redistribution benefits of default...