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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19811| Title: | Quality of Institutions, Credit Markets and Bankruptcy |
| Keywords: | G33 K10 G21 D82 ddc:330 Credit markets institutions bank competition information sharing bankruptcy relationship banking |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank-firm relationship and show that the bank?s decision to liquidate bad firms has two opposing effects. First, the bank receives a payoff if a firm is liquidated. Second, it loses the rent from incumbent customers that is due to its informational advantage. We show that institutions must improve significantly in order to yield a stable equilibrium in which the optimal number of firms is liquidated. There is also a range where improving institutions may decrease the number of bad firms liquidated. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19811 |
| Other Identifiers: | http://hdl.handle.net/10419/19811 ppn:500758492 RePEc:zbw:gdec05:3491 |
| Appears in Collections: | EconStor |
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