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It is well recognised today that improving the investment climate fosters productive private investment and is the key to sustainable growth. However, the question remains whether an improvement in the investment climate would benefit the poor. In this thesis, I focus in particular on two institutions of prime importance for small informal entrepreneurs in developing countries who lack bargaining power and resources: the courts to enforce contracts and the financial markets to get access to credit. Chapter 2 examines how the case pendency rate in state courts in India affects the contracting behaviour of small non-agricultural informal firms. My estimates suggest that a slow judiciary implies more breaches of contract, discourages firms from undertaking relationship-specific investments, impedes the access of firms to formal financial institutions, and favours inefficient dynasties. This chapter leaves an important question open. Chapter 3 examines the reasons as to why the judiciary is so congested in India. I find that amendments increasing the number or complexity of procedures to be followed by the Courts and that the ambiguity in the Code of Civil Procedure increase the expected duration of a trial in High Courts. Using the spatial and temporal variation in the enactment of amendments and occurrence of conflicting decisions as instrumental variables for the expected duration of a trial in High Court, I am then able to measure the impact of judiciary's speed on credit markets, agricultural development and manufacturing performance. Another key feature of a good investment climate is the access to credit markets. Chapter 4 assesses how an improvement in the access to finance through microfinance can benefit the poor directly. Using the technique of matching, this chapter shows a positive effect of microfinance on the expenditure per capita, the supply of labour, the level of enrolment in school of boys and girls. For instance, participants spend 3% more on average than non-participants. Interestingly, participants do not spend more than non-participants in treatment villages. This seems to indicate positive externalities.

This thesis consists of three self contained essays in financial economics where agents interact under asymmetric information about some latent economic fundamentals. The chapter on "Asset pricing under noisy rating signals: Does benchmarking on ratings matter.", demonstrates that, in the presence of noise traders who benchmark their supply of a traded asset to public signals (ratings), informed traders are induced to rationally overreact to news about fundamentals, leading to excess asset price volatility. The analysis also shows that if market participants use public ratings solely for price discovery purposes then, under no circumstances ratings could weaken price efficiency, even in the presence of higher order beliefs. The chapter on "Prudential liquidity regulation and the insurance aspect of lender of last resort" considers prudential liquidity regulation as quid pro quo for emergency liquidity assistance by the central bank. In the presence of bank funding constraints, information-induced bank runs and an objective by the central bank to maintain a balanced budget under its lender of last resort (LOLR) facility, it is shown that prudential liquidity regulation is socially desirable if the banking sector is characterised by sufficient funding constraints, high profit opportunities and a relatively volatile deposit base. Otherwise, liquidity regulation is too costly from a welfare perspective, even after taking into account the social value of LOLR insurance. Finally, the chapter titled "Co-ordination failure and the signalling role of banks in debt-exchange offers" studies the out-of-court restructuring of debt when a creditor bank makes concessions conditional on other creditors' actions. In line with empirical evidence, the analysis shows that a bank's conditional commitment to restructure injects a degree of strategic solidity among other creditors, who then accept restructuring more easily. That leads to resolution of financial distress at lower levels of firm's fundamentals, compared to the situation with no bank in the game, that could imply a lower deadweight cost of inefficient liquidation. It is also discussed how conditional restructuring concessions may lead to a combination of herding incentives and co-ordination problems where, depending on the extent of conditionality, one may dominate the other.

Voluntary business regulation at the transnational level is becoming a significant feature of global environmental governance. The thesis considers the origins of the Equator Principles, a voluntary code of conduct created by commercial banks to manage environmental and social risks associated with project financing in developing countries. Based on the operational policies of the International Finance Corporation (IFC), the framework has thus far been adopted by over 60 commercial banks since its launch in June 2003, representing over 85 percent of the global project finance market. The thesis argues that the rise of private environmental governance in the commercial project finance market is closely linked to the emergence and diffusion of environment and social norms in the international system. It traces the normative origins of the Equator Principles to the theory and practice of environmental project review first institutionalized at the World Bank in the early 1970s, then later expanded and applied to the IFC's private sector projects as well. The thesis argues that the rise of a corporate accountability movement in the financial sector was the principal reason why commercial banks decided to collaborate and create a common industry standard based on environmental and social norms institutionalized in multilateral institutions. It makes three main contributions to our understanding of private environmental governance formation. First, the power of transnational advocacy groups to influence corporate behavior is determined by the legitimacy of the norms they promote as well as political opportunities presented by market structures. Secondly, international organizations are increasingly facilitating and legitimizing voluntary business regulation as the most effective institutional form of governance for integrating public interest concerns into transnational markets. And third, voluntary business regulation, such as the Equator Principles, is positioning private actors and forms of authority at the center of transnational rule-making processes, producing systems of rules that both challenge and reinforce international law, regimes and institutions.

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Considering the backdrop of volatile markets, the endurance of economic recession, and intensified radical economic and workplace restructuring, it is ever more important to understand how contemporary and past employment relationships enable or constrain people's flourishing. The aim of this research study is to capture the dynamic relationship between the organisation and nature of bank work and workers' moral economy between the late 1970s and 2000s. The research is underpinned by a novel, holistic, theoretical framework that brings together moral economy and labour process approaches. The moral economy is at the heart of the framework and is informed by three key thinkers: Karl Polanyi and E. P. Thompson, who capture the ubiquitous tension between a stable, moral and human society and the economic practices of liberalised markets, and by Andrew Sayer's consideration of lay morality. The moral economy and labour process framework provides insightful analysis of how and why the m aterial reality of economic practices and the organisation of work are experienced, mediated and re-shaped by different groups of actors. By utilising a realist and deeply qualitative approach, the research is informed by thirty-nine work oral history interviews with different generations of bank workers. It examines the radical transformation of the organisation of work and its moral economy in clearing banks between the late 1970s and 2000s. Thereby, the thesis offers a critical analysis of the bureaucratic and paternalistic principles that guided bank work until the late 1980s but also provides insights into the dynamics of social connection between workers and people's attachment to the occupation. These findings are set in contrast to the organisation of work in the 1990s and 2000s and their disconnection from the moral economy of the past. It is suggested that bank work has been radically re-structured and is dominated by a marketized labour process that instrumentalises human engagement and social relations that, in turn, fosters disconnection and individualisation. Nevertheless, the thesis suggests that even under poor working conditions social and moral dimensions of humanity persist and enable workers to humanise the labour process.

This empirical research has explored strategizing in the banking sector in a non-Western context. Attention was drawn to strategy meaning, strategizing activities and strategy practitioners. A comparison of strategizing was made between Islamic banks governed by Shari’ah and non Islamic ones. Strategy practices and strategy practitioners have received little research attention. Hence, this research is influenced by the strategy as practice perspective to describe the context for strategy actors and strategizing practices. The importance of this study is derived from its focus on the micro level of strategizing and strategists in a cross cultural context. Its focal point is strategy practitioners from different levels of the organisation. A multiple case study approach was adopted. Data were obtained via 41 semi-structured interviews with purposively selected strategy actors, complemented by secondary data, from six of the 12 commercial banks in Saudi Arabia: two Islamic ones, two local conventional ones and two international banks. Findings reveal that no single consensus definition was expressed by strategists, yet there were similarities in the various conceptualizations they offered. Thirteen practices employed by practitioners were identified and classified as recursive or adaptive. This research provides insights into who the strategists (internal and external) are by focusing on capabilities and engagement. Findings confirm that social norms could restrict certain actors’ participation, such as the cultural barrier to women’s participation. The engagement of strategy actors in different practices varied, which means different strategy practices could be practised by different strategy actors; moreover, they differed in their level of influence. In terms of differences between conventional and Islamic banks, there was no distinction in the way strategy was perceived and practised. The only distinctive aspect was in terms of strategy actors, where in the Islamic banks, the Shari’ah Board and Shari’ah Group played key roles. The research contributes to the emerging s-as-p perspective with micro level, cross-cultural data, identifying 13 practices and linking them to modes, timing and actors.