Whether China continues its business-as-usual investment-driven, environment-polluting growth pattern or adopts an investment and innovation-driven, environmentally sustainable development holds important implications for both national and global environmental governance. Building on a Ramsey-Cass-Koopmans growth model that features endogenous technological change induced by R&D and knowledge s...

Labour and the Market Value of the Firm What role does labour play in firms’ market value? We explore this question using a production-based asset-pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labour is akin to investment in capital and that the two interact, with the interaction being a crucial determinant of market value behaviour. We use ag...

This study examines the corporate investment behavior during China’s reform era. We apply the Generalized Method of Moments (GMM) estimation to the investment Euler equation models that characterize the Chinese firms’ investment decisions. Based on the estimated structural parameters, we derive the effective discount rate (“implied” cost of capital) perceived by the firm managers to decide inve...

Learning about Education Limited human capital investment is a common characteristic of low-income countries despite the fact that estimated returns to educational investment in low-income countries are generally higher than in high-income countries. Empirical evidence suggests that income and credit constraints can only account for a small part of this underinvestment. Recent experimental evid...

Is the stock market boom a result of the baby boom? This paper develops an overlapping generations model in which a baby boom is modeled as a high realization of a random birth rate, and the price of capital is determined endogenously by a convex cost of adjustment. A baby boom increases national saving and investment and thus causes an increase in the price of capital. The price of capital is ...

We analyze public investment in social infrastructure using a two-period model in which a government must intermediate all infrastructure investment. Voters choose a government from two alternative types, high quality and low quality. A high quality government obtains higher returns on infrastructure but also demands a bigger consumption payoff for intermediating investment, implying higher tax...

The recent financial turmoil has underlined the importance of analyzing the link between banks’ balance sheets and economic activity. We develop a dynamic stochastic general equilibrium model in which bank capital mitigates an agency problem between banks and their creditors. As a result, the capital position of banks affects their ability to attract loanable funds and therefore influences the ...

This paper uses the framework of an OLG economy for an analysis of the dynamic interaction between the precision of information about individual skills, investment in education, human capital accumulation and social welfare. The human capital of an individual depends on both his (subjectively) random ability and his investment in education. Individual investment in education is financed through...

Abstract: Adequately considering the intangible value of Information and Communication Technology (ICT) investments has been problematic for as long as organisations have been making ICT investment decisions. This paper presents a framework for considering the intangible capital value of ICT investments. The framework applies the tripartite model of intangible resources, as proposed by the Aust...

This paper provides an empirical examination of the investments by venture capital firms for the period before, during and after the stock market bubble of 1999 and 2000. Comparisons are made between pre-bubble, bubble and post-bubble investment patterns by state for location, stage and industry of investment. Location quotients for investments by state and industry are displayed. States with l...