Bruche, Max; Segura, Anatoli - Centro de Estudios Monetarios y Financieros (CEMFI) - 2013
We develop an equilibrium model of debt maturity choice of firms, in the presence of fixed issuance costs in primary debt markets, and an illiquid over-the-counter secondary debt market with search frictions. Liquidity in this market is related to the ratio of buyers to sellers, which is...