Capital Flows with Debt- and Equity-Financed Investment-Equilibrium Structure and Efficiency Implications /

This paper distinguishes between debt and equity flows in the presence of information asymmetry between the firm's 'insiders' and 'outsiders' in a small open economy. It shows the inadequacy of capital investment because its scope is too narrow and the investment each firm m...

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Бібліографічні деталі
Автор: Razin, Assaf
Інші автори: Sadka, Efraim, Yuen, Chi-Wa
Формат: Журнал
Мова:English
Опубліковано: Washington, D.C. : International Monetary Fund, 1998.
Серія:IMF Working Papers; Working Paper ; No. 1998/159
Онлайн доступ:Full text available on IMF
Опис
Резюме:This paper distinguishes between debt and equity flows in the presence of information asymmetry between the firm's 'insiders' and 'outsiders' in a small open economy. It shows the inadequacy of capital investment because its scope is too narrow and the investment each firm makes is too little. An unconventional policy tool is proposed to correct the market failure: lump-sum subsidies to firms that choose to equity-finance their investments.
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Фізичний опис:1 online resource (21 pages)
Формат:Mode of access: Internet
ISSN:1018-5941
Доступ:Electronic access restricted to authorized BRAC University faculty, staff and students