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Purpose: In reality, financial decisions are made under conditions of asymmetric information that results in either favorable or adverse selection. As far as financial decisions affect growth of the firm, the latter must also be affected by either favorable or adverse selection. Therefore, the core objective of this chapter is to examine the determinants of each financial decision and the effects on growth of the firm under conditions of information asymmetry.

Design/Methodology/Approach: This chapter uses data for the non-financial firms listed in S&P 500. The data cover quarterly periods from 1989 to 2014. The statistical tests include linearity, fixed, and random effects and normality. The generalized method of moments estimation method is employed in order to examine the relative significance and contribution of each financial decision on growth of the firm, respectively. Standard and proposed proxies of information asymmetry are discussed.

Findings: The results conclude that there is a variation in the impact of financial variables on growth of the firm at high and low levels of information asymmetry especially regarding investment and financing decisions. A similar picture emerges in the cases of firm size and industry effects. In addition, corporate dividen d policy has a similar effect on firm growth across all asymmetric levels. These findings prove that information asymmetry plays a vital role in the relationship between corporate financial decisions and growth of the firm. Finally, the results contribute to the vast literature on the estimation of information asymmetry by demonstrating that the classical and standard proxies for information asymmetry are not consistent in terms of the ability to differentiate between favorable or adverse selection (which corresponds to low and high level of information asymmetry).

Originality/Value: This chapter contributes to the related literature in two ways. First, this chapter offers updated empirical evidence on the way that financing, investment, and dividends decisions are made under conditions of favorable and adverse selection. Other related studies deal with each decision separately. Second, the study offers new proxies for measuring information asymmetry in order to reach robust estimates of the effects of financial decisions on growth of the firm under conditions of agency problems.

This paper reassesses the center-periphery relationship in light of recent developments in the international monetary system and the currency hierarchy in a geopolitical economy framework. The center-periphery relationship has historically been examined in relation to the international division of labor, the pace and diffusion of technical progress associated with it, and the pattern of consumption it embodies. As conceived by structuralists and dependentistas, it is not seen as the result of the uneven and combined development of capitalism: it does not take into account the struggle between the dominant States (center), which want to reproduce the current order and the contender States (periphery) which aim to accelerate capitalist development to reduce the unevenness, and even to undermine the imperial project of dominant states. In a geopolitical economy framework, a powerful obstacle peripheral countries face in their efforts at combined development is the international monetary system, something that the theorists of the center-periphery relationship have perhaps overlooked. Because of its subordinate position in the currency hierarchy, the periphery is subject to greater external vulnerability, greater instability of exchange and interest rates, and as a result, enjoys a more restricted policy space. In this sense, the chapter shows that, beyond macroeconomic policies, the currency hierarchy in a context of high capital mobility limits a range of developmental policies of peripheral countries, reinforcing the unevenness of world economy and constraining combined development.

This paper investigates the European Central Bank’s (ECB) monetary policies. It identifies an anti-growth bias in the ECB’s monetary policy approach: the ECB is quick to hike, but slow to ease. Similarly, while other players and institutional deficiencies share responsibility for the euro’s failure, the bank has generally done “too little, too late” with regard to managing the euro crisis, preventing protracted stagnation, and containing deflation threats. The bank remains attached to the euro area’s official competitive wage repression strategy which is in conflict with the ECB’s price stability mandate and undermines the bank’s more recent unconventional monetary policy initiatives designed to restore price stability. The ECB needs a “Euro Treasury” partner to overcome the euro regime’s most serious flaw: the divorce between central bank and treasury institutions.

The objective of this paper is two-fold. First, through the use of two indices that correct for the bias introduced by the relative size of the U.S. economy, it describes the degree of regional dependence reached in the NAFTA area as compared to Europe. Second, it asks whether the stage is set for the successful adoption of a single currency, namely the dollar, within the area. In an attempt to answer this question, the paper identifies the one critical asymmetry that should be addressed before considering the complete monetary integration of the area.

In a globalised economy, the EU, being self-confident, could shape international standards by defending and promoting its own socioeconomic model. Social democratic parties rhetorically confess the need for a ‘European social model’, but meanings and ways to achieve it differ largely. In a comparative case study on the programmatic positioning of the German Sozialdemokratische Partei Deutschlands and the Spanish Partido Socialista Obrero Español, the parties' perspectives on the integration mode and their handling of the Economic and Monetary Union framework and its crisis over the last decade are traced. Although similar paths from neoliberal convictions of the ‘third way’ to a positive integration process in a fiscal union setting are found, the scope and levels vary, illustrating the abilities of both parties to meet new transnational challenges. The crisis of the Eurozone was a definitive turning point for the positioning of the Social Democrats in Spain in favour of more political and fiscal integration. In contrast, their German comrades already advocated increased social integration of the EU since 2005 but remained very cautious regarding reforms of the economic framework established by the Eurozone.