Adverse selection, endogenous borrowing constraints and firm growth

Arthur Fishman; Miriam Krausz

doi:10.1016/j.econlet.2010.04.038

Adverse selection, endogenous borrowing constraints and firm growth

Arthur Fishman
, Miriam Krausz

Department of Economics

Bar-Ilan University

Research output: Contribution to journal › Article › peer-review

Abstract

If banks face asymmetric information about loan quality, endogenous borrowing constraints which restrict the size of new firms may emerge in equilibrium. High quality firms reduce financing costs by starting off small and increasing their size over time.

Original language	English
Pages (from-to)	219-221
Number of pages	3
Journal	Economics Letters
Volume	108
Issue number	2
DOIs	https://doi.org/10.1016/j.econlet.2010.04.038
State	Published - Aug 2010

Keywords

Asymmetric information
Endogenous borrowing constraints
Firm growth

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10.1016/j.econlet.2010.04.038

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Adverse selection, endogenous borrowing constraints and firm growth

Abstract

Keywords

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