In this study, I investigate the association between firm innovation and formal versus informal finance for 5,982 firms in 30 transition economies. I also examine whether the association between firm innovation and formal versus informal finance differs between developed and developing...

We investigate the real effects of shadow banking in the case of technological innovation. Using manually collected entrusted loan data, we find that firm-to-firm entrusted loans, once the largest part of the shadow banking sector in China, enhance the borrowers’ innovation output. The effects...

The constraint on informal finance is commonly taken to be high costs and limited supply. But the majority of informal investors - family and friends - is often willing to supply funds at negative returns, and yet many borrowers tap family and friends only as a last resort. We explain this...

Job rotation, where a principal routinely rotates agents among tasks, is argued to be a powerful antidote for agency problems inside an organization. However, when soft information dominates transactions inside a firm, verifying the information set that led to a particular decision becomes...

In this paper, we analyze the Chinese economic growth model post-2008 and more notably the effect of 4 Trillion Yuan stimulus in the aftermath of the Global Financial Crisis. We look at the Chinese financial system and the credit creation mechanism in the economy. The data shows that post-2008...

This paper investigates the impact of economic policy uncertainty (EPU) on shadow banking. Using privately available data, I find shadow banks, on average, lose approximately $35 ($44) million in return (yield) due to heightened EPU. Moreover, the adverse effect of EPU is more substantial for...

This paper lays out some of the basic concepts surrounding financial inclusion, including access to banking, digital payments and financial literacy, as well as markets for health insurance, crop insurance, agricultural credit, small firm finance, and microcredit/ microfinance. It goes on to...

This paper documents how traditional and shadow banks interacted with one another during the 2007 financial crisis, when both assets and liabilities flew from shadow to traditional banks. To rationalize their behavior, we propose a simple model which demonstrates the symbiotic coexistence and...