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Adverse Selection in Credit Markets and Regressive Profit Taxation

Scheuer, Florian - 2014

In many countries, taxes on businesses are less progressive than labor income taxes. This paper provides a justification for this pattern based on adverse selection that entrepreneurs face in credit markets. Individuals choose between becoming entrepreneurs or workers and differ in their skill...

Persistent link: https://www.econbiz.de/10013065398

Credit within the Firm

Pistaferri, Luigi - 2010

We exploit time variation in the degree of development of local credit markets and matched employer-employee data to assess the role of the firm as an internal credit market. In less developed local credit markets firms can offer a flatter wage-tenure profile than firms in more developed credit...

Persistent link: https://www.econbiz.de/10013144510

Credit Shocks and Aggregate Fluctuations in an Economy with Production Heterogeneity

Khan, Aubhik - 2011

We study the cyclical implications of credit market imperfections in a calibrated dynamic, stochastic general equilibrium model wherein firms face persistent shocks to aggregate and individual productivity. In our model economy, optimal capital reallocation is distorted by two frictions:...

Persistent link: https://www.econbiz.de/10013121072

Collateral Pricing

Benmelech, Efraim - 2008

in particular redeployable collateral, lowers the cost of external financing and increases debt capacity …

Persistent link: https://www.econbiz.de/10012772363

Discrimination in the Small Business Credit Market

Blanchflower, David G. - 2015

This paper uses data from the 1993 National Survey of Small Business Finances to determine the extent to which minority-owned small businesses face constraints in the credit market beyond those faced by white-owned small businesses. First, we present qualitative evidence indicating that black-...

Persistent link: https://www.econbiz.de/10012750807

Unnatural Selection : Perverse Incentives and the Misallocation of Credit in Japan

Peek, Joe - 2003

condition, and these firms continue to perform poorly after receiving additional bank financing. Troubled Japanese banks …

Persistent link: https://www.econbiz.de/10012786620

Bank Supervision and Corporate Finance

Beck, Thorsten - 2003

We examine the impact of bank supervision on the financing obstacles faced by almost 5,000 corporations across 49 … greater financing obstacles. Moreover, powerful official supervision tends to increase firm reliance on special connections … monitoring tend to ease the financing obstacles faced by firms …

Persistent link: https://www.econbiz.de/10012786649

Credit-Market Sentiment and the Business Cycle

Lopez-Salido, David - 2016

Using U.S. data from 1929 to 2013, we show that elevated credit-market sentiment in year t – 2 is associated with a decline in economic activity in years t and t + 1. Underlying this result is the existence of predictable mean reversion in credit-market conditions. That is, when our sentiment...

Persistent link: https://www.econbiz.de/10013001213

Inequality in Human Capital and Endogenous Credit Constraints

Hai, Rong - 2017

This paper investigates the determinants of inequality in human capital with an emphasis on the role of the credit constraints. We develop and estimate a model in which individuals face uninsured human capital risks and invest in education, acquire work experience, accumulate assets and smooth...

Persistent link: https://www.econbiz.de/10012966600

The Loan Covenant Channel : How Bank Health Transmits to the Real Economy

Chodorow-Reich, Gabriel - 2017

We document the importance of covenant violations in transmitting bank health to non-financial firms using a new supervisory data set of bank loans. Roughly one-third of loans in our data breach a covenant during the 2008-09 period, providing lenders the opportunity to force a renegotiation of...

Persistent link: https://www.econbiz.de/10012946490