How do differences in the creit channel affect investment behavior in the U.S. and the Euro area? To analyze this question, we calibrate an agency cost model of business cycles. We focus on two key components of the lending channel, the default premium associated with bank loans and bankruptcy...

Credit contracting between a lender with monopoly market power and a small start-up entrepreneur may lead to the rejection of projects whose expected benefits are higher than their total costs. This inefficiency may be eliminated by government support in the form of credit guarantees or interest...

This paper explains trade credit policy based on the agency theory. According to this theory we have developed an agency model based on the adverse selection and moral hazard phenomena arising from the relation between sellers and buyers. This model has been estimated by using panel data...