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Credit Constraints and Contract Enforcement
BE Journal of Economic Analysis and Policy, 2006Abstract This paper demonstrates that credit constraints can lead to the inability to enforce contracts, thereby creating inefficiency. If time elapses between the contract period and the enforcement period, a credit constrained agent that uses the proceeds of trade to fund consumption faces a greater cost to enforce a contract than an ...
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We employ a novel data set on almost 30,000 trade credit contracts to describe the broad characteristics of the parties that contract together and the key terms of these contracts. Whereas prior work has typically used information on only one side of the buyer-seller transaction, we utilize information on both, allowing for the first analysis of buyer ...
Klapper, Leora +2 more
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Government contracts and trade credit
Advances in Accounting, 2020Abstract This study examines the association between government contracts and firms' use of trade credit. Firms with government contracts may demand less trade credit because of their lower operational risk, higher firm performance, stronger capacity to generate internal funds, and better access to other sources of financing.
Hongkang Xu, Mai Dao
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The Letter of Credit as a Contract
2021Abstract This chapter considers the relationships created by the issue of a letter of credit. In particular, it focuses on the relationship between the issuer and/or confirmer of the credit on the one hand, and the seller of the goods on the other.
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Credit Rationing and Implicit Contract Theory
Journal of Money, Credit and Banking, 1980THE RECENT SURVEY by Baltensperger [S] shows that the question of why bankers undertake nonprice rationing of credit is still very much unanswered. Previous attempts to address the question have ended up merely assuming the answer. For example, the attempts prior to the 1960s all involved the assumption that interest rates could not adjust so as always
Fried, Joel, Howitt, Peter
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Credit contracting and bidding under wealth constraints [PDF]
Bidders are typical financially constrained in auctions of valuable goods. Research seeking to understand the significance of this constraints has focused on a number of different aspects of the problem. In the article a credit contracting and bidding in a first-price sealed-bid auction is modeled in the case when bidder valuation and wealth are ...
Charles E. Hyde, James A. Vercammen
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Supply contracts with credit sale
2008 IEEE International Conference on Service Operations and Logistics, and Informatics, 2008This article proposes a non-cooperation game model to operate the two-agents supply chain with credit sale under stochastic demand function in retailer market and under the retailer's budget constraint. We consider two types of contracts: the traditional wholesale price contract and its variation that is offered by the producer to the retailer ...
null Chengli Zheng, null Yan Chen
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Debt Contracts and Credit Rationing
1997Abstract In previous chapters, we maintained the assumptions that all decision-makers in an economy can specify, agree on, and eventually verify states of the world, and that decision-makers know each other ‘s preferences and beliefs.
Jürgen Eichberger, Ian R Harper
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