search query: @indexterm EQUILIBRIUM THEORY / total: 340
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| Author: | Suominen, M. |
| Title: | Industry equilibrium with outside financing and moral hazard: Implications for market integration |
| Journal: | European Economic Review
2004 : DEC VOL. 48:6, p.1227-1241 |
| Index terms: | Financing Moral hazard Equilibrium theory Market theory Credit rationing Risk Integration Markets Models |
| Language: | eng |
| Abstract: | This article examines the effects of market integration on industry structure in a setting where firms need outside financing and have a moral hazard problem in taking potentially unnecessary risks. When the industry equilibrium with credit rationing is being compared to the industry equilibrium without credit rationing, competition increases and prices decline as market integrate. However, the results indicate that in markets with credit rationing more exit and a smaller decline in prices are found, and the market value of the industry increases. |
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