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The Financing Of Private Enterprise Under Information Asymmetry

Posted on:2002-10-17Degree:MasterType:Thesis
Country:ChinaCandidate:A F WangFull Text:PDF
GTID:2156360032952019Subject:Industrial Economics
Abstract/Summary:PDF Full Text Request
Capital market is characterized of multi-layer structures by information incompleteness. According to the amount of information, capital market can be divided into four layers. which is mini scope individual capital market. local capital market. country capital market and international capital market. More high capital market needs more much information. But in every capital market layer there are two sorts of asymmetry information between creditor and debtor, one is the information about debtor抯 moral character and ability, the other is the information about enterprise management. If private enterprise wants to finance in the capital market successfully, it must provide enough information in order that creditor can calculate the probability of the potential loan loss, and cut down the information cost. However. our society is just changing system. Private enterprise will run risk if it let out the information of management. Therefore it is the best financing decision of private enterprise to monopoly the management information as possible as it can at present.
Keywords/Search Tags:information incompleteness, information asymmetry, capital market multi-layer structure, formal financing system, informal financing system, personal financing, impersonal financing
PDF Full Text Request
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