Does official aid pave the road for private foreign investment or does it suffocate private initiative by diverting resources towards unproductive activities? In this paper we explore this question using data for a large number of developing and emerging economies. Controlling for countries‘ institutional environment, we find that, evaluated at the mean, the marginal effect of aid on private fo...

I model inefficient resource allocations in M-form organizations due to influence activities by division managers that skew capital budgets in their favor. Corporate headquarters receives two types of signals about investment opportunities: private signals that can be distorted by managers, and public signals that are undistorted but noisy. Headquarters faces a tradeoff between the cost of atta...

We characterize equilibrium in a dynamic investment game with two-dimensional signals, where each firm observes its idiosyncratic cost of investment and a signal correlated with common investment returns. We demonstrate that the one-step property holds and that investment-cost cutoffs for type-1 firms (with the high common-value signal) and type-0 firms (with the low common-value signal) satisf...

This paper uses proprietary data on the employment histories of a large fraction of the U.S. labor force to show that labor market outcomes can be partly explained by previous employers’ technology investment decisions. Exploiting leveraged buyouts as shocks to firms’ production technologies, we find that workers employed when a private equity acquisition occurs realize longer subsequent employ...

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rivate participation in the provision of infrastructure is less than was once expected, particularly in developing countries. Some reasons for this are identified in this paper. It is argued that the problem of dealing with market power in the provision of infrastructure services is similar to that of other forms of procurement in the presence of long-lived and immobile assets employed specific...