haku: @author Hyytinen, A. / yhteensä: 4
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| Tekijä: | Hyytinen, A. Väänänen, L. |
| Otsikko: | Where do financial constraints originate from? An empirical analysis of adverse selection and moral hazard in capital markets |
| Lehti: | Small business economics
2006 : NOV-DEC, VOL. 27:4, p. 323-348 |
| Asiasana: | adverse selection moral hazard small and medium-sized enterprises (smes) finland |
| Vapaa asiasana: | financial constraints |
| Kieli: | eng |
| Tiivistelmä: | Voluminous and growing literature focuses on the effect financial constraints have on firm formation and survival. Recent evidence shows that also the growth of small and medium-sized enterprises (SMEs) is constrained by the availability of finance. However, there is a lack of knowledge on the origins of these financial constraints. This paper analyzes empirically the origins of financial constraints. In particular, the study measures the prevalence of adverse selection and moral hazard in capital markets. The study uses a unique survey data on Finnish small and medium-sized enterprises (SMEs). The results suggest that adverse selection is empirically more prevalent than moral hazard. In regressions modeling the capital markets SMEs face, adverse selection has more explanatory power than moral hazard. Finally, the study finds that adverse selection and moral hazard are inversely related to the age of firms. Thus, the finding is in line with Diamond's (1989) hypothesis. |
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