Asymmetric Information and Loan Contracts in a Neoclassical Growth Model

Bose, Niloy; Cothren, Richard

doi:10.2307/2953706

Cited by 38 publications

(28 citation statements)

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“…Bencivenga and Smith, 1991;Cooley and Smith, 1998). In other models, financial development is an endogenous outcome of the growth process with consideration given to the co-evolution of real and financial activity (e.g., Greenwood and Jovanovic, 1990;Bose and Cothren, 1997).…”

Section: Introductionmentioning

confidence: 99%

Endogenous growth and the emergence of equity finance

Bose

2005

Journal of Development Economics

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Section: Introductionmentioning

confidence: 99%

Endogenous growth and the emergence of equity finance

Bose

2005

Journal of Development Economics

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“…In our model, the financial contract stipulates price and quantities. In Bose and Cothren (1997) and Bencivenga and Smith (1993), the financial instruments are: the interest rate, the loan amount, and the probability of rationing. The pivotal modeling difference in the financial contract between their analysis and ours is that in their paper, each borrower receives the same amount of investment.…”

Section: Relation To Existing Literaturementioning

confidence: 99%

Endogenous capital market imperfections, human capital, and intergenerational mobility

Hidalgo-Cabrillana

2009

Journal of Development Economics

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“…Hence, the link between financial intermediation and development is not necessarily positive (e.g. Augier and Soedarmono, 2011;Deidda and Fattouh, 2002;Cothren, 1996 &1997) 3 .…”

Section: Related Literature and Research Focusmentioning

confidence: 99%

Bank Opacity, Intermediation Cost and Globalization: Evidence from a Sample of Publicly Traded Banks in Asia

Soedarmono

Tarazi

2013

SSRN Journal

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This paper examines the relationship between opacity and the cost of intermediation in Asian banks. Using a sample of publicly traded commercial banks from 2002 to 2008, our empirical results show that higher opacity is associated with a lower intermediation cost in banking. Hence, bank managers in their efforts to overcome asymmetric information issues and to improve transparency tend to offset the higher cost of acquiring and disclosing information by increasing the cost of intermediation for entrepreneurs. Moreover, a deeper look at the country level indicates that the negative link between opacity and the cost of intermediation is reversed as globalization increases. Greater globalization therefore outweighs managerial entrenchment behavior to preserve bank opacity. Our findings highlight that bank opacity issues are even more costly in countries with higher globalization.

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Asymmetric Information and Loan Contracts in a Neoclassical Growth Model

Cited by 38 publications

References 0 publications

Endogenous growth and the emergence of equity finance

Endogenous growth and the emergence of equity finance

Endogenous capital market imperfections, human capital, and intergenerational mobility

Bank Opacity, Intermediation Cost and Globalization: Evidence from a Sample of Publicly Traded Banks in Asia

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