Financial sector inefficiencies and the
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Pierre-Richard AgΓ©nor; Joshua Aizenman
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Article
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2005
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John Wiley and Sons
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English
β 162 KB
This paper analyses the implications of inefficient financial intermediation for debt management in a model where firms rely on bank credit to finance their working capital needs and lenders face state verification and contract enforcement costs. We show that lower expected productivity, higher enfo