We study how non-financial multinational companies propagate economic declines from their subsidiaries located in countries experiencing an economic downturn to subsidiaries in countries not experiencing one. We find that investment is 18% lower in subsidiaries of these parents relative to the...

We examine whether financial markets development facilitates the efficient allocation of resources. Using European micro-level data for 1996–2005, we show that firms in industries with growth opportunities use more external finance in financially more developed countries. This result is...

Using cross-sectional analysis of corporate dividend policy we show that large shareholders extract rents from firms and expropriate minority shareholders in the weak corporate governance environment of an emerging economy. By comparing dividends paid across varying corporate ownership...

The establishment of the EU-15 'single market' in 1993 brought about a high degree of synchronization of industry shocks, while substantial diversity existed in the development of country-level financial markets. We compare within-industry growth rates of similar 'single-market' firms facing...

Using a dynamic model of a step-by-step innovation race between financially constrained firms, I study how financial constraints affect innovation activity. The novel theoretical results derive from an analysis of the interaction between the incentive effect of competition on innovation and the...

We exploit the substantial diversity in financial development of the 'single-market' EU- 15 economies to test whether more developed financial systems are better at tackling asymmetric information proxied by firm age and size. Comparing the growth effect of financial development across firms of...

As part of the Single Market Program the European Commission commanded the liberalization and regulatory harmonization of utilities, transport and telecommunication services. This paper investigates whether and how this process affected the productivity of European network firms. Exploiting the...