This paper presents a competitive search model focusing on the impact of asymmetric information on credit markets. We show that limited entry by lenders results in endogenous credit rationing, which, in turn, plays a key role in managing adverse selection and prevents the credit market from...

This paper examines whether companies' innovativeness affects the availability of capital and, therefore, whether this group is financially constrained. It uses an objective, indirect way of measuring financial constraints based on the assumption that financially restricted firms only invest...

This paper examines how R&D human capital can mitigate the negative effects of financing constraints on firm innovation, using survey data from 4000 South Korean manufacturing firms. The results confirm that financing constraints are generally associated with lower levels of product innovation....