It has been argued that competing banks make inefficiently frequent use of collateralization in situations where they are better able to evaluate a project's risk than entrepreneurs. We study the bank's choice between screening and collateralization in a model where banks do not have this...

The paper applies the notions of network cost and efficiency, drawn from complex network theory, to fully characterize the classic “market versus firm” dichotomy of Coase 1937. Thanks to network analysis, the latter emerges as a wider issue which touches every system of interconnected agents...

Seminal papers on the size of the firm emphasise the benefits of in-sourcing over outsourcing services from the market. This provides a rationale for the development of large firms, especially in circumstances of market risk and uncertainty as to the price and quantity of available services....

Explanations for differences in the performance and behavior of domestic and foreign-owned banks are grounded in assumptions about the ability of parent banks to provide subsidiaries with capital and knowledge and the ability to manage asymmetric information and agency problems in the...

Extensive regulatory changes and technological advances have transformed banking systems to a great extent. Banks have reacted to the challenges posed by the new operating environment by creating new products and expanding their activities to some uncharted business areas. In this paper, we...

We construct the topology of business networks across the population of firms in an emerging economy, Pakistan, and estimate the value that membership in large yet diffuse networks brings in terms of access to bank credit and improving financial viability. We link two firms if they have a common...

This paper examines the ongoing integration of banks and markets through the blurring of boundaries between them. It considers how this integration affects the raison d'etre of banks and its implications for the future evolution of banks, systemic risk and prudential regulation. Shadow banks, PE...

Leverage is one of the key underlying features of banks' balance sheets. Traditionally, leverage arises directly through the use of deposited funds or other balance-sheet items, such as bonds and credit lines, as a supplementary tool of banks' equity capital in financing fresh loans and...