Financial intermediaries can choose the extent to which they want to be active investors, providing valuable services like advice, support and corporate governance. We examine the determinants of the decision to become an active financial intermediary using a hand-collected dataset on European...

We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment...

Since its creation in 1997, more than 400 European firms have been listed on Euro.NM, the circuit of stock exchanges targeted at the financing of innovative firms in high-tech industries. We collect a unique database from the listing prospectuses and annual reports of these firms. We...

The creation of Europe´s ´new´ stock markets represents a major experiment in market design with important implications for the ability to support innovative, fast-growing companies. We evaluate the success of these markets based on a large number of measures of firm performance and strategy...

A literature has developed to substantiate Rosenstein-Rodan's intuition that coordination of a critical mass of investments may induce industrialization through a 'big push'. This literature has essentially ignored the question of what economic institutions may overcome the coordination failures...

Much of the recent growth and development literature is based on the notion that economies may exhibit multiple equilibria, due to coordination failures. Surprisingly, little attention has been given to analyze which economic institutions may solve such failures. We examine the role of banks as...