This paper addresses the hotly-debated question: do Chinese firms overinvest? A firm-level dataset of 100,000 firms over the period of 2000-07 is employed for this purpose. We initially calculate measures of investment efficiency, which is typically negatively associated with overinvestment. Despite wide disparities across various ownership groups, industries and regions, we find that corporate...

Bank privatization and tighter credit enforcement are believed indispensable to facilitate the Eastern European transition process. We analyze lending by value-maximizing banks, the only source of capital in the transition, faced by non-performing loans to the state-owned sector. We show that banks have a perverse incentive to fund former debtors, although less efficient and more risky, because...

Until 1994, when inflation was brought down from the sky-high levels that had prevailed since the mid seventies, the financial system in Brazil was almost entirely geared towards maximizing float income, which answered for close to half of the overall earnings of commercial banks. In that environment, being efficient in processing transactions, such as the payment of bills and checks, was param...

This paper develops a model of global liquidity with international banks as the carriers of liquidity conditions across borders. Global banks raise wholesale funding from financial centers which is deployed globally through centralized portfolio allocation decisions from headquarters. As the shadow value of bank funding is equalized across regions, permissive credit conditions in financial cent...

This article provides a framework to guide the choice and design of a fitting Public Private Partnerships (PPP), which is applied to a Dutch example of biogas/sustainable energy projects. The framework focuses on ‘legitimate public governance’, merging Beetham’s dimensions of legitimacy (legality, shared beliefs and consent) with three types of governance mechanisms (market, network and hierarc...