I consider an environment in which contract enforcement is a decision variable for the principal. I construct a model in which entrepreneurs cannot commit to repaying investors for the capital advanced, but investors can force repayment by spending resources. The principal uses enforcement to reduce the resources available to the agent after a default, thus providing incentives for the agent to...

Macro-level estimates of the productivity of public capital are typically larger than microlevel estimates. The evidence also shows large cross-country differences in the quality of public capital. A general equilibrium growth model is introduced to explain both facts. The productivity of firms specializing in differentiated intermediate inputs depends on public capital whose provision is subje...

A large literature suggests that countries with better governance have higher growth rates. We explore whether this is also true at the sub-national level in Indonesia. We exploit a new dataset of firm perceptions of the quality of economic governance in 243 districts across Indonesia to estimate the impact of nine different dimensions of governance on district growth. Surprisingly, we find rel...

In this paper we try to answer the question as to whether insider trading disclosures convey valuable information to market participants, valuable in the sense of the profitability of an investment strategy that faithfully mirrors insider behaviour. Our interest in this subject is limited to the case of announcements concerning insider transactions issued over a six-year period on the Warsaw St...

Industry-Wide Work Rules and Productivity: Evidence from Argentine Union Contract Data In the early 1990’s, the Argentine government promoted a framework for productivity-based negotiations between firms and unions at low levels of organization. The policy weakened the industry-wide collective bargaining system, which sets working conditions for all firms in an industry. This paper employs newl...

We examine the effect of financial integration on capital stocks and income per capita, explicitly taking into account the division of output between tradable and non-tradable goods. Capital per worker in a financially integrated country is shown to depend on the size and relative capital-intensity of the tradable sector. Using a panel of 67 countries over the period 1976-1999, we show a weakly...

Drawing on the stylized facts and evidences, in a computable general equilibrium (CGE) model, this paper examines the impact on TFP of North–South, North–North trade-related triangular R&D spillovers. By constructing different technology appropriation parameters based on embodied and disembodied R&D, absorption and learning effects, it shows: (i) North–South R&D flows have a positive impact on ...

There are large differences in income per capita across countries. Growth accounting finds that a large part of the differences comes from the differences in total factor productivity (TFP). This paper explores whether barrier to entry is an important factor for the cross-country differences in TFP. The paper develops a new model to link entry barriers and technology adoption. In the model, hig...

Although previous works have discussed the benefits of precolonial centralization for development in Africa, the findings and the mechanisms provided do not explain the heterogeneity in development outcomes of formerly centralized states. Using new survey data from Nigeria, I find a significant negative effect of precolonial centralization on access to certain public services for centralized re...

Constitutions and Economic Development: Evidence from the American Indian Nations This paper presents an empirical examination of economic and institutional development. Utilizing a novel data set on American Indian tribal nations, we investigate how constitutional design affects economic development, while holding the broader legal and political environment fixed. Instrumental variables regres...