We analyze how a firm might protect quasirents in an environment of imperfect capital markets, where switching lenders is costly to the borrower, and contracts are incomplete. As switching costs make the firm vulnerable to ex post exploitation, it may want to diversify lending. Multiple-source lending, however, suffers from coordination failure. An uncoordinated withdrawal of funds will force a financially ...
This paper examines the changes in the inter-industry wage structure experienced by Russia since 1993, as part of its transition from a plan-based economy to a more \market oriented" structure. Using two Russian household panel data sets, the RLMS and the RUSSET, we _nd that since the transformation process began, the dispersion of inter-industry wage structure has increased. Moreover, Russia exhibits ...
This paper investigates the strategic value of the managerial incentive scheme in affecting firms' incentive in R&D investment and their product market activities. Firstly, we find that in Cournot-quantity competition, owners strategically assign a non-profitmaximization objective to their managers. Consequently, managers in a delegation game invest more in cost-reducing R&D, and have higher output, ...
The growth of the German economy intrinsically depends on the development of German exports to the euro area, which is by far the biggest market for German products. The paper estimates a structural equation for the export demand from the EMU member countries, which is suitable for both simulations and short-term forecasts. However, the equation systematically underestimates the export demand for data ...
In a framework with an upstream monopoly and a downstream duopoly, we analyze the impact of convex costs at the downstream level. In contrast to the case of constant marginal costs, vertical integration does not imply complete market foreclosure. While the nonintegrated downstream firm receives a strictly positive amount of the intermediate good, the downstream allocation is inefficient. However, a ...
