Quality of Institutions, Credit Markets and Bankruptcy
dc.contributor.author | Hainz, Christa | en_US |
dc.date.accessioned | 2006-08-01T15:36:39Z | |
dc.date.available | 2006-08-01T15:36:39Z | |
dc.date.issued | 2005-02-01 | en_US |
dc.identifier.other | RePEc:wdi:papers:2005-745 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/40131 | en_US |
dc.description.abstract | 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. | en_US |
dc.format.extent | 120855 bytes | |
dc.format.extent | 3151 bytes | |
dc.format.extent | 388097 bytes | |
dc.format.mimetype | text/plain | |
dc.format.mimetype | text/plain | |
dc.format.mimetype | application/pdf | |
dc.language.iso | en_US | en_US |
dc.relation.ispartofseries | 745 | en_US |
dc.subject | Credit Markets, Institutions, Bank Competition, Information Sharing, Bankruptcy, Relationship Banking. | en_US |
dc.subject.other | G21, G33, K10, D28 | en_US |
dc.title | Quality of Institutions, Credit Markets and Bankruptcy | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Business | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/40131/3/wp745.pdf | en_US |
dc.owningcollname | William Davidson Institute (WDI) - Working Papers |
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