analysis further demonstrates that a bank loan with/without insurance can conditionally outperform trade credit financing and …

I develop a simple contract-theoretic model of multi-stage economies to address the nexus between trade credit, bank … credit and balance-sheet contagion. First, I show that competitive markets in which heterogeneous price-taker firms compete … strategically by setting trade credit settlements have a unique symmetric equilibrium, which dictates the production flow along the …

theory involve the trade-off between the tax advantages of using debt finance and the increasing risk of bankruptcy debt … finance involves. The theory is first used to examine the supply of nominal bonds -- it is thus a theory of the debt …-equity ratio. Then the firm's optimal supply of index bonds is examined, and the values of the firm using the alternative debt …