Firm Heterogeneity, Internal Finance, and `Credit Rationing

Dados Bibliográficos

ID9714270
AutoresCharles W Calomiris (0000-0003-3228-0660), R Glenn Hubbard, Robert Hubbard
Ano1990
Volume100
Fascículo399
Páginas90
Data de publicação1990-03-01
Peer ReviewedSim
Open AccessNão
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.2307/2233596
OpenAlexW2891129921
IdiomaEN
Citações recebidas10

This paper assesses the role of internal net worth (holding constant investment opportunities) in the allocation of credit in the presence of asymmetric information in the capital market. The authors consider an economy in which both "symmetric-information" and "information-intensive" entrepreneurs seek funds from the capital market, and they develop a simple general equilibrium model of credit allocation. Their emphasis is on shocks to borrower net worth. Depending on levels of net worth, the symmetric-information allocation, a "credit collapse," or intermediate allocations are possible. The model yields predictions corresponding to accelerator effects on investment and output, as well as real effects of collateral redistributions. Copyright 1990 by Royal Economic Society

Capital allocation line · Capital market · Credit rationing · Debt · Economics · Financial intermediary · Interest rate · Loan · Microeconomics · Monetary economics · Net worth · Perfect information · Banking stability, regulation, efficiency · Corporate Finance and Governance · Economic theories and models · Finance