Working Paper
Credit rationing, bankruptcy cost, and the optimal debt contract for small business
Abstract: An examination of whether the costly random verification scheme affects the optimal debt contract for small business. It finds, contrary to Townsend (1979) and Williamson (1986, 1987), that the standard debt contract is the optimal debt contract with the costly random verification scheme.
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https://doi.org/10.26509/frbc-wp-199702
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https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/working-papers/1997/wp-9702-credit-rationing-bankruptcy-cost-and-the-optimal-debt-contract-pdf.pdf
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Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers (Old Series)
Publication Date: 1997
Number: 9702