Soft budget constraints (SBCs) can be said to exist in situations where governments rescue loss-making firms in order to guarantee their survival by means of either a direct or an indirect injection of credit. The credit markets of the former socialist economies of Central and Eastern Europe...

Summary McKinnon's [McKinnon, R. I. (1973). Money and capital in economic development. Washington, DC: The Brookings Institution] complementarity hypothesis predicts that money and investment are complementary due to self-financed investment, so that a real deposit rate is the key determinant of...

This article investigates the impact of the entry to the European Union (EU) on the dynamic links between the stock market indices of Czech Republic, Hungary, Poland and Slovakia vs. those of the euro-zone by utilizing the international version of the feedback-trading model. Prior to entry,...

This article reappraises the financial repression hypothesis for India in light of the partial liberalization of the financial sector in the early 1990s, using for the first time state-of-the-art multivariate cointegration and vector error correction models (VECM). From this more robust testing...

This paper examines the contributions of real (permanent) and nominal (temporary) shocks on the nominal and real exchange rates of the Indian Rupee against the US dollar in the period since 1993, using the long-run structural VAR technique. If nominal shocks account for most of the movement in...

We empirically investigate the effects of market structure on profitability and stability for 1929 banks in 40 emerging and advanced economies over 1999–2008 by incorporating the traditional structure-conduct-performance (SCP) and relative-market-power (RMP) hypotheses. We observe that a...

This article empirically investigates the volatility spillover of stock returns from the market to disaggregated industry sectors. Seventeen sectors from the US and UK stock markets are estimated by the GARCH technique based on daily data from 1973 to 2008. The key findings are two-fold. In the...

Within the mechanism of endogenous growth, this paper empirically investigates the impact of financial capital on economic growth for a panel of 60 developing countries, through the channel of domestic capital formation. By estimating the model for different income groups, it is found that while...