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Relational contracts, the cost of enforcing formal contracts, and capital structure choice : theory and evidence
Fahn, Matthias; Merlo, Valeria; Wamser, Georg - 2017
This paper shows that the cost of enforcing contracts governing non-financial relationships between firms affects a firm's financing structure. We analyze the interaction between a firm's capital structure and the type of contracts it uses to deal with its suppliers. We first develop a...
Persistent link: https://www.econbiz.de/10011674383
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Trust and contracts : empirical evidence
D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan - 2020
Trust between parties should drive the negotiation and design of contract: if parties did not trust each others … over time, we find that lower trust increases contract completeness. Not only contract complexity but also the verifiable …
Persistent link: https://www.econbiz.de/10012318377