Venture capital activity differs considerably across countries. Venture capital markets are highly developed in few countries, while these markets are almost nonexistent in many other countries. This paper examines the conditions that have to be fulfilled for liquid venture capital markets to...

Venture capital activity differs considerably across countries. Venture capital markets are highly developed in few countries, while these markets are almost nonexistent in many other countries. This paper examines the conditions that have to be fulfilled for liquid venture capital markets to...

Competition among banks promotes growth and stability for an economy with production externality. Following Arrow and Debreu (1954), I formulate a standard growth model with externality — a two-period version of Romer (1986) — as a game among consumers, firms, and intermediaries. The...

This paper studies how the assignment of patents as collateral determines the savings of fi rms and magni fies the effect of innovative rents on investment in research and development (R&D). We analyse the behaviour of innovative fi rms that face random and lumpy investment opportunities in R&D....

The relationship between financial liberalization and poverty has been the subject of significant work and scrutiny in the field of development economics, however much of this criticism has been based upon empirical foundations and has rarely been extended to reconcile with the theory of...

We analyze the interaction between growth and financial development in a model of product innovation. Innovation is risky and can be monitored only imperfectly and at a cost. Financial intermediaries emerge endogenously to avoid the duplication of monitoring activities and negotiate contracts...