Abstract
We develop a continuous-time model of optimal lending contracts under limited enforcement and provide closed-form solutions. We characterize the dynamics of firms’ growth rate, Tobin's Q, and capital structure over their life cycles.
| Original language | English |
|---|---|
| Pages (from-to) | 136-140 |
| Number of pages | 5 |
| Journal | Economics Letters |
| Volume | 163 |
| DOIs | |
| State | Published - Feb 2018 |
ASJC Scopus Subject Areas
- Finance
- Economics and Econometrics
Keywords
- Capital structure
- Dynamic contract
- Firm dynamics
- Limited enforcement
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