A Theory of Banks, Bonds, and the Distribution of Firm Size

We draw on stylized facts from the finance literature to build a model where altering the relative costs of bank and bond financing changes the entire distribution of firm size, with implications for the aggregate capital stock, output, and welfare. When reducing transactions costs in one market, the resulting increase in output and welfare are largest when transactions costs in the other market are very high.

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Authors:	Valderrama, Diego ; Russ, Katheryn N.
Institutions:	Economics Department, University of California-Davis

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 915 4 pages long
Classification:	E10 - General Aggregative Models. General ; G11 - Portfolio Choice ; G14 - Information and Market Efficiency; Event Studies ; G32 - Financing Policy; Capital and Ownership Structure ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008620449