@inproceedings{Hainz2005Quality,
abstract = {The number of firm bankruptcies is surprisingly low in economies
with poor institutions. We study a model of bank-firm relationship and show
that the bank?s decision to liquidate bad firms has two opposing effects.
First, the bank receives a payoff if a firm is liquidated. Second, it loses the
rent from incumbent customers that is due to its informational advantage.
We show that institutions must improve significantly in order to yield a
stable equilibrium in which the optimal number of firms is liquidated. There
is also a range where improving institutions may decrease the number of
bad firms liquidated.},
author = {Christa Hainz},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {G33; K10; G21; D82; 330; Credit markets; institutions; bank competition; information sharing; bankruptcy; relationship banking},
language = {eng},
number = {18},
series = {Proceedings of the German Development Economics Conference, Kiel 2005 / Verein f\"{u}r Socialpolitik, Research Committee Development Economics},
title = {Quality of Institutions, Credit Markets and Bankruptcy},
url = {http://hdl.handle.net/10419/19811},
year = {2005}
}
