Reputation acquisition in imperfect financial markets

Koji Asano

Economics Letters, 2016, vol. 139, issue C, 76-78

Abstract: This paper incorporates financial market imperfections into the Diamond (1989) model where reputation concerns limit managers’ excessive risk-taking. We show that the reputational discipline collapses because of an increase in pledgeability and a decline in interest rates over time.

Keywords: Reputation; Risk-taking; Pledgeability; Low interest rates (search for similar items in EconPapers)
JEL-codes: G01 G11 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:139:y:2016:i:c:p:76-78

DOI: 10.1016/j.econlet.2016.01.001

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