Fahn, Matthias; Merlo, Valeria; Wamser, Georg - 2017
enforce high quality, but their use is costly. If these costs are too high, relational contracts - self-enforcing informal … arrangements that can be sustained in long-term relationships - are needed. Relational contracts, though, can only be sustained if … debt is not too high. The reason is that a firm's commitment in relational contracts is determined by its future profits in …