We study the welfare properties of a market with pairwise meetings and asymmetric information, establishing an equivalence between asymptotically expost individually rational and asymptotically (ex-ante, interim and ex-post) efficient equilibrium sequences. <!--ID="" Correspondence to:O. Yosha-->

We study the welfare properties of a market with pairwise meetings and asymmetric information, establishing an equivalence between asymptotically ex-post individually rational and asymptotically (ex-ante, interim and ex-post) efficient equilibrium sequences.

Using a newly-constructed data set on Israeli Initial Public Offering (IPO) firms in the 1990s, we study costs and benefits of universal banking. We find that a firm whose equity was underwritten by a bank-affiliated underwriter, when the same bank was also a large creditor of the firm in the...

We investigate the nature of monitoring by stake holders using data on Japanese manufacturing firms. Shareholders and bank-centred corporate groups monitor firms by reducing activities with scope for managerial moral hazard such as advertising, R&D and entertainment expenses. Monitoring of this...

State-level consumption exhibits excess sensitivity to lagged income to the same extent as US aggregate data, but state-specific (idiosyncratic) consumption exhibits substantially less sensitivity to lagged stste-specific income - a result that also holds for Canadian provinces. We propose the...

The authors provide empirical evidence that risk sharing enhances specialization in production. To the best of their knowledge, this well-established and important theoretical proposition has not been tested before. The empirical procedure is summarized as follows. First, the authors construct a...

Despite significant capital-market reforms in the mid-1980s, the Israeli government and banks continue to play an unusually dominant role in Israeli financial markets. Israeli banks operate as merchant banks and, through pyramid structures of ownership, control large segments of manufacturing,...

Empirical studies of the role of large shareholders as monitors of firm management have focused on the relation between ownership structure and firm performance and have identified managerial turnover in periods of poor performance as a monitoring mechanism. Our central contribution is to...