We study the relationship of risk aversion and debt maturity structure. In a model in which adverse selection in financial markets creates a role for the use of short-term debt, we allow the possibility of borrowers being risk-averse. This creates a trade-off between reduced expected financing...

We analyze a model in which a risk-averse country finances its development project under asymmetric information. Before the project renders its fruits, two types of news will become available, one of which will reduce the asymmetry of information between the country and its investors. We...

This paper examines some recent contributions to the interactions between the firm’s financial policy and its links with its clients, its suppliers and its competitors.

A widely known theory of predation holds that firms with ample financial resources may prey on their financially weak rivals to drive them out of the market. Yet, rational weak firms should take this predatory threat into account when designing its financial liabilities. In this paper, we...

This paper analyzes a mixed oligopoly in which firms may hire managers and delegate their decisions to them for strategic reasons. Unlike previous research, we examine the case in which a public firm competes with a foreign firm and a domestic firm, both of them private. We show that these two...

In a relatively recent paper, Gehrig and Stenbacka (Eur Econ Rev 51, 77–99, <CitationRef CitationID="CR1">2007</CitationRef>) show that information sharing increases banks’ profits to the detriment of creditworthy entrepreneurs in a model of a banking duopoly with switching costs and poaching. They restrict their analysis to the case...</citationref>

This paper analyzes a mixed duopoly in which a public firm and a (possibly partially) foreign-owned firm choose their capacity scales before competing in quantities. We show that the private firm chooses over-capacity, as in previous literature, except if it is completely foreign-owned. In this...

This paper evaluates the challenges facing developing countries when there is uncertainty about the policy maker type. We consider a country characterized by volatile output, inelastic demand for fiscal outlays, high tax collection costs, and sovereign risk, where future output depends on the...

We examine firms' decisions to hire managers in a duopoly where a public firm competes with a foreign private firm. In contrast with the case in which the public firm competes with a domestic private firm -where only the private firm decides to hire a manager- we find that both firms hire...