Product market competition and optimal debt contracts: The limited liability effect revisited

被引：38
|
作者：
Faure-Grimaud, A [1 ]
机构：
[1] Univ London London Sch Econ & Polit Sci, Financial Mkt Grp, Interdisciplinary Inst Management & FMG, London WC2A 2AE, England
来源：
EUROPEAN ECONOMIC REVIEW | 2000年 / 44卷 / 10期
关键词：
contract theory; debt; asymmetric information; renegotiation; imperfect competition;
D O I：
10.1016/S0014-2921(99)00026-4
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
This paper shows that asymmetric information between lenders and borrowers plays a crucial role in the existence of interactions between financial decisions and output market strategies. Lenders offer an optimal, renegotiation-proof financial contract which resembles a standard debt contract. Computing Cournot equilibria, debt causes firms to compete less aggressively: the usual(positive) limited liability effect on quantities is offset by a negative one due to (endogenous) financial costs. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: L13; L14; G30.
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页码：1823 / 1840
页数：18
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