The respective study covers three aspects; factors determining credit rating, credit rating impact on performance of entities and the relation between stock returns and credit rating. The study focuses on the firms listed in Taiwan Stock Exchange (TSE) of Taiwan. The empirical analysis uses the data of 50 firms rated by Taiwan Ratings Corporation (TRC) for the period 2010-2015. Two estimation t...

Traditional supply chain inventory modes with trade credit usually only assumed that the up-stream suppliers offered the down-stream retailers a fixed credit period. However, in practice the retailers will also provide a credit period to customers to promote the market competition. In this paper, we formulate an optimal supply chain inventory model under two levels of trade credit policy with d...

We develop a simple model of credit market imperfections, in which the agents have access to a variety of investment projects, which differ in productivity, in the investment size, and in the severity of the agency problems behind the borrowing constraints. A movement in borrower net worth can shift the composition of the credit between projects with different productivity levels. The model thu...

We study the optimal loan securitization policy of a commercial bank which is mainly engaged in lending activities. For this we propose a stylized dynamic model which contains the main features affecting the securitization decision. In line with reality we assume that there are non-negligible fixed and variable transaction costs associated with each securitization. The fixed transaction costs l...

This paper examines the effects of corruption and government control of the banking system on the sensitivity of commercial lending rates to changes in international financial market conditions. Using a sample of 18 countries located in the Western hemisphere (the “Americas”), we find that most countries’ lending rates are insensitive to changes in international financial market conditions. Onl...

We develop a model of the credit market where competitive lenders offer long-term contracts specifying a non-linear schedule of possible repayment schedules to borrowers who may differ both in their taste for immediate gratification (β) and their prior beliefs about that taste (β̂). The equilibrium contract to a borrower with given beliefs β̂ is discontinuous: it features an advantageous option i...

Two thirds of US households hold bank type credit cards, and most of them revolve high-interest card debt. Standard models cannot account for the observed co-existence of such debt with (i) substantial asset accumulation by retirement age, and (ii) substantial holdings of low-rate liquid assets. Hyperbolic discounting can resolve the former but not the second puzzle (Laibson, et al., 2000). Ber...

Research on relationship lending focuses attention on economic factors which influence the relationships between SMEs’ owners/managers and banks but no previous work has focused on the role of trust. Trust is expected to reduce agency costs, the perceived credit risk and, thus, influence credit availability and credit terms. Trustworthiness is associated with three attributes of SME owner manag...