Entrepreneurship and Credit Rationing: How to Screen Successful Projects in this Current Crisis Period

C. Monica Capra, Irene Comeig and Matilde O. Fernández-Blanco ()
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Matilde O. Fernández-Blanco: University of Valencia

Chapter Chapter 15 in Entrepreneurship, Innovation and Economic Crisis, 2014, pp 139-147 from Springer

Abstract: Abstract The current credit rationing heavily influences entrepreneurship and, more dramatically, the viability of innovation projects. In this context, mechanisms to screen successful projects are of paramount importance for both lenders and entrepreneurs. We present an experiment to test the collateral-interest mechanism of credit screening. Our results confirm that incentive-compatible pairs of collateral-interest rate can distinguish between projects of different success probability, even in moral hazard settings.

Keywords: Current Crisis Period; Moral Hazard Setting; Credit Screening; Incentive Compatible Contracts; Separate Borrowers (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-02384-7_15

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DOI: 10.1007/978-3-319-02384-7_15

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