Kroll, Yoram; Cohen, Assaf - In: Journal of Business Finance & Accounting 27 (2000-05) 3&4, pp. 395-421
We compare alternative solutions to underinvestment (UI) problems in firms subject to limited access to equity markets, interest ceilings, and constraints on the volume of debt. Collaterals (assets or compensating balances) and credit insurance ('regular' or 'outcome' insurance whereby the...