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they have sufficient funding from banks, possibly to avoid the burden from interest accumulations on bank credit …. Availability of trade credit does not help to obtain bank credit, and there is no substitution between supplier and bank lending … among the young firms, even during the latest credit crunch …
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The “homemade leverage” conjecture by Modigliani and Miller (1958) implies that firm leverage and investors’ leverage are substitutes. Using the data of margin loans by Chinese stock investors, we find that investors take significantly fewer margin loans on a stock when the company...
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