The authors examine the factors that influence banks'type of organizational form when operating in foreign markets using an original database of the branches and subsidiaries in Latin America and Eastern Europe of the top 100 international banks. They find that regulation, taxation, the degree...

Should donors interested in the effectiveness of developmental programmes rely on conditional budget support or on project aid? To answer this question, we present a model in which only a subset of developmental expenditures can be subject to conditionality. We show that budget support is...

This paper analyzes the effects of exchange rate volatility on bilateral trade flows. Through use of a gravity model and panel data from western Europe, exchange rate uncertainty is found to have a negative effect on international trade. The results seem to be robust with respect to the...

This paper identifies the various channels that give rise to a "sovereign-bank nexus" whereby the financial health of banks and sovereigns is intertwined. We find that banks and sovereigns are linked by three interacting channels: banks hold large amounts of sovereign debt; banks are protected...

We analyze the effects of bailout expectations on sovereign bond spreads in emerging markets. The non-bailout of Russia in August 1998 is interpreted as an event that decreased the perceived probability of future crisis lending to emerging markets. If official rescues are expected to mitigate...

We investigate the effects of competition in the financial sector on the creation of firms in the nonfinancial sector, explicitly allowing for heterogeneous effects across borrowers characterized by different degrees of asymmetric information. We find evidence of a bell-shaped relationship...