FERRARIS, LEO; MINETTI, RAOUL - In: Journal of Money, Credit and Banking 39 (2007) 4, pp. 945-964
We develop a theory of the interaction between the entry of lenders and the real sector. The high liquidation skills of incumbent lenders render them too tough in terminating high-risk/return projects. Being "foreign" to the market, newcomers have lower ability to liquidate than incumbents. This...