A multinational corporation engages in foreign direct investment for the extraction of a natural resource in a developing country. The corporation bears the initial investment and earns as a return a share of the profits. The host country provides access and guarantees conditions of operation....

What is the role of entrepreneurship in economic development from the perspective of neo-Austrian and new institutional economics and what is the difference between these approaches? Neo-Austrian economists claim that economic development is caused by entrepreneurial discovery. New institutional...

The aim of this work is to specify, accept or reject a priori assumption of a positive synergy in economic cluster development, to propose à quantitative assessment of synergy and à description of the interaction process among enterprises in the cluster. There are presented arguments in...

Recently, Batabyal (2005) has analyzed a game model of dowry determination in which a mediator plays a key role. Batabyal's analysis shows that the equilibrium dowry offers from the bride and the groom optimally trade off the desire to make an assertive offer with the likelihood that this offer...

The joint liability literature claims that positive assortative matching, or risk homogeneity, is always the first best solution. We examine this claim in presence of group formation costs and find that the assertion is not always true.

This paper develops a theoretical model to examine the conditions under which clustered firms in a less developed country may cooperate in an export consortium to market their output collectively in a developed country. The consortium eliminates the role of an intermediary firm in the developed...

Most decisions involve variability in two dimensions: uncertainty across states of nature and fluctuations over time. The stakes involved in tradeoffs between these variability dimensions are especially high for the poor who have difficulty managing and recovering from shocks. We assume Epstein...

This paper examines the role of cooperativeness and impatience in the exploitation of common pool resources (CPRs) by combining laboratory experiments with field data. We study fishermen whose main, and often only, source of income stems from the use of fishing grounds with open access. The...

This paper shows that an asymmetric group debt contract, where one borrower co-signs for another, but not vice versa, leads to heterogeneous matching. The analysis suggests that micro finance organizations can achieve the first best by offering asymmetric group contracts.

This paper presents a theoretical description of some of the recent developments in the financial programs offered by microfinance institutions (MFIs). We show that even under for-profit MFIs, there is not necessarily a crowding out of the poorest microentrepreneurs, and that MFIs may optimally...