2013 Fiscal Year Final Research Report
Research into the land holdings as collateral and the borrowing costraint
| Project/Area Number |
23530369
|
|---|
| Research Category |
Grant-in-Aid for Scientific Research (C)
|
| Allocation Type | Multi-year Fund |
|---|
| Section | 一般 |
|---|
| Research Field |
Public finance/Monetary economics
|
|---|
| Research Institution | Nara University of Education |
|---|
Principal Investigator |
MORI Nobuhiro 奈良教育大学, 教育学部, 教授 (40190996)
|
|---|
| Co-Investigator(Kenkyū-buntansha) |
OKAMURA Makoto 広島大学, 社会(科)学研究科, 教授 (30177084)
TOMODA Yasunobu 神戸市外国語大学, 外国語学部, 准教授 (30437280)
OGURA Yoshiaki 早稲田大学, 政治経済学術院, 准教授 (70423043)
|
|---|
| Project Period (FY) |
2011 – 2013
|
| Keywords | 有担保融資 / 無担保融資 |
|---|
| Research Abstract |
We examine how financial loans influence the cost functions of firms and market equilibrium, from the standpoint of industrial organization. In our model, a representative entrepreneur chooses secured or unsecured loans. The interest rate of the former is relatively low because of its collateral, but it comes with a borrowing constraint. The latter has a high interest rate stemming from a risk premium. Owing to the cost minimization by firms, these loan types affect the cost function of the entrepreneur and the output of the market.
As the main results, in a short-run equilibrium, the existence of two types of financial loans leads to a discontinuous supply curve, and the possibility of non-existence of market equilibrium. If we assume a free-entry condition in the long-run, firms that choose unsecured loans and pay the risk premium cannot survive due to the severe competition stemming from free entry. We obtain a unique equilibrium in which all entrepreneurs choose secured loans.
|
