Documents Havrylchyk, Olena 2 results

"Since the crisis, Estonia has experienced one of the most pronounced declines in the ratio of non-residential investment to GDP in the OECD. In addition, investment in intangible capital has remained well below OECD standards, partly explaining the low innovative capacities of typical Estonian firms. Uncertainty created by regional geopolitical tensions has played a role but poor investment performance stems from domestic factors too, such as a normalisation after the boom years, the lack of adequate skills and insufficient incentives for risk-taking. Improving lifelong learning and maintaining skilled mothers in employment can contribute to reducing shortages in skills needed by investors. Restructuring of insolvent firms should be eased to increase credit recovery and redirect capital to the most productive ones. Developing alternatives to bank funding can support investment in small and innovative firms. While there is room to improve the quality of infrastructure further, selection and prioritisation of projects should improve. Incentives for green investment, in particular to reduce pollution emitted by the oil shale industry and to achieve energy efficiency gains, could be strengthened."

"In a growing number of OECD countries policymakers are designing specific regulations for lending-based crowdfunding platforms. In March 2018, as a part of its Fintech action plan, the European Commission also presented its proposal for the EU-wide passporting regime. To evaluate these new regimes, this study collects information about the regulation of lending-based crowdfunding platforms in 17 OECD countries and proposes a theoretical framework to reflect about different regulatory regimes. In this context, we explore market failures in lending-based crowdfunding and identify regulatory challenges. Although lending-based crowdfunding platforms do not technically perform risk and maturity transformation, in some countries, flexible regulation allows them to experiment with different business models to provide services of credit risk management (via risk grades, provision funds, automated lending) and liquidity provision (via secondary markets). These platforms could perform the same functions as banks in the future, but there are theoretical reasons to believe that platform-based intermediation could be more stable than banking intermediation. The success of lending-based crowdfunding platforms hinges on their ability to solve moral hazard issues and overcome significant barriers to entry related to scale and scope economies, adverse selection, as well as funding cost advantage of incumbent large banks. There are also risks related to an excessive reliance on funding of leveraged and ‘too big to fail' institutional investors that are prone to runs and moral hazard problems."