Suchergebnisse

This study presents theoretical and empirical analyses of the time allocation of entrepreneurs as a response to weak property rights protection. Using a nationwide random-sample survey of more than 3,000 entrepreneurs in over 100 cities in China, we find that entrepreneurs, responding to the violation of property rights, spend large proportions of their working time on lobbying activities to protect their businesses at a cost to management time. Moreover, the sensitivity of lobbying time to property rights protection is reduced if the entrepreneur is politically connected or if the firm is larger or older.

This paper provides a unified analysis for the onset of the 1998 financial crisis and the strong economic recovery afterward in Russia and other former Soviet Union countries. Before the crisis a banking failure arose owing to the coexistence of a lemons credit market and high government borrowing. In a lemons credit market low credit risk firms switched from bank to nonbank finance, including trade credits and barter trade, generating an externality on banks' interest rates. The collapse of the treasury bills market in the financial crisis triggered a change in banks' lending behavior, providing initial conditions for banking development.

This paper explains both the onset of the financial crisis in 1998 and the striking economic recovery afterwards in Russia and other Former Soviet Union (FSU) economies. Before the crisis banks do not lend to the real sector of the economy and firms use non-bank finance, including trade credits and barter trade, to finance production. The banking failure arises due to the coexistence of adverse selection in a lemons credit market jointly with high government borrowing. The collapse of the treasury bills market in the financial crisis of August 1998 triggers a change in banks lending behavior. A strong economic recovery follows which provides initial conditions for banking development.

This paper provides a unified theory to explain the onset of the financial crisis in 1998 and the striking economic recovery in Russia and the former Soviet Union afterwards. Before the crisis, the banking sector in these economies was stuck in a development trap in which the banking sector is separated from the real sector of the economy. The separation between the two sectors arises due to a lemons lending market and due to a large government budget. In a lemons credit market firms may find it cheaper to raise liquidity through non-bank finance (trade credits from other firms) rather than through bank finance. As a result non-bank finance may generate an externality on the lending rates of banks. In equilibrium most firms in the economy rely on non-bank finance and the financial sector focuses on trading government securities. The collapse of the treasury bills market in Russia in the financial crisis of 1998 reversed this process and thus acted as a trigger to pull the economy out of the trap. This has led to the strong economic recovery and provided initial conditions for banking development. Empirical evidence with firm level data from Ukraine in 1997 and with country level data for transition economies support the model's predictions.

The sweeping change in political economy associated with the spectacular growth of the private sector in China is rarely studied empirically in the economics literature. This paper fills this gap. The central subject of this paper is the nature of the political economy of the Chinese private sector and of the Communist Party of China during these changes. We empirically examine the dynamics of rent creation from the Party membership and other political connections when the regime is changed from anti-capitalistic to procapitalistic. Endogeneity problems are addressed. We identify the causality of rents and the political connections of private entrepreneurs.