The global credit crisis of 2008 provides a unique opportunity to study the e¤ects of …nancing constraints on corporate behavior. Based on standard economic priors, we investigate whether this credit supply shock has a di¤erential impact on the real and …nancial policies of credit constrained …rms. In contrast to previous research, which has used proxies such as …rm size and credit ratings to m...

This paper develops a theory of the firm, and equilibrium credit rationing mechanisms in oligopoly with R&D-product market competition. Credit rationing arises from a hold-up problem between wealth-constrained entrepreneurs and external investors. Underinvestment occurs if entrepreneurial wealth constraint is binding, even though the equilibrium corporate governance structure addresses the hold...

This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms’ productivities. To maintain incentive-compatibility, banks lend below the amount needed for first-best production. The longer time needed for export shipments induces a tighter credit constraint on exporters than on purely domestic firms, even in the exporters’ home m...

The lack of access to formal credit at affordable cost (effective interest) is the most critical constraint faced by the rural entrepreneurs to get involved in productive profitable business activities. This study explores the causes behind the widespread existence of informal credits as investment capital for small house-based business. Based on a primary survey on house based industrial owner...

Abstract The unique feature of the rural credit market in China is dominance zero collateral and zero-interest reciprocal lending its long-term coexistence with formal loan. This paper investigates association between constraint prevalence loans China. Based on identification households’ status, we examine effects utilization informal loans. We find that significantly increases borrowers’ relia...

The paper considers a general approach for classifying objects using mathematical programming algorithms. The approach is based on optimizing a utility function, which is quadratic in indicator parameters and is linear in control parameters (which need to be identified). Qualitative characteristics of the utility function, such as monotonicity in some variables, are included using additional co...

The extension of mortgage credit to underserved, minority, and higher credit-risk populations has been a topic of discussion among researchers and policymakers in recent years, as both the Clinton and Bush administrations have articulated policies that have sought to advance the homeownership opportunities of underserved and minority groups. Research accordingly has sought to identify the deter...

This paper analyzes the investment behavior of ...rms under a quantity constraint on the amount of external funds which can be raised at a given cost (credit constraints). In this world, investment-cash ‡ow sensitivities decrease in the degree of credit constraints, until a ...rm becomes e¤ectively unconstrained. This generates a “U-shaped” curve for the relationship between sensitivities and c...