On financial frictions and firm's market power
| dc.contributor.author | Casares Polo, Miguel | |
| dc.contributor.author | Deidda, Luca | |
| dc.contributor.author | Galdón Sánchez, José Enrique | |
| dc.contributor.department | Economía | es_ES |
| dc.contributor.department | Ekonomia | eu |
| dc.date.accessioned | 2023-07-04T09:56:47Z | |
| dc.date.available | 2024-03-12T00:00:08Z | |
| dc.date.issued | 2023 | |
| dc.date.updated | 2023-07-04T09:42:38Z | |
| dc.description.abstract | There are two opposing welfare effects of market power in a model with monopolistic competition, loan defaults and moral hazard. The loss of output produced if firms set a higher mark-up over marginal costs confronts with some gain due to higher expected profits and the reduction of defaults. Such tradeoff results in an optimal level of market power that decreases with the efficiency of liquidation following default on a loan. If moral hazard is pervasive, credit rationing cuts down the default rates and mitigates the welfare cost of financial frictions. | en |
| dc.description.sponsorship | The authors thank Banco de España for financial support through the project. Política monetaria en economías con fricciones financieras y bancarias. Miguel Casares and Jose E. Galdon-Sanchez also acknowledge financial support from Spanish State Research Agency through project PID2021-127119NB-I00 and by “ERDF A way of making Europe”. Luca G. Deidda also acknowledges the financial support by the Italian Ministero dell’Università (Grant No. 20157NH5TP), Fondazione di Sardegna, Università di Sassari (Una tantum 2019), and RAS (Grant No. RASSR89213). | en |
| dc.embargo.lift | 2024-03-12 | |
| dc.embargo.terms | 2024-03-12 | |
| dc.format.mimetype | application/pdf | en |
| dc.identifier.citation | Casares, M., Deidda, L. G., & Galdon‐Sanchez, J. E. (2023). On financial frictions and firm’s market power. Economic Inquiry, ecin.13146. https://doi.org/10.1111/ecin.13146 | en |
| dc.identifier.doi | 10.1111/ecin.13146 | |
| dc.identifier.issn | 0095-2583 | |
| dc.identifier.uri | https://academica-e.unavarra.es/handle/2454/45730 | |
| dc.language.iso | eng | en |
| dc.publisher | Wiley | en |
| dc.relation.ispartof | Economic Inquiry 2023;1–24 | en |
| dc.relation.projectID | info:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/PID2021-127119NB-I00/ | |
| dc.relation.publisherversion | https://doi.org/10.1111/ecin.13146 | |
| dc.rights | © 2023 Western Economic Association International. | en |
| dc.rights.accessRights | info:eu-repo/semantics/openAccess | |
| dc.subject | Credit rationing | en |
| dc.subject | Loan defaults | en |
| dc.subject | Market power | en |
| dc.title | On financial frictions and firm's market power | en |
| dc.type | info:eu-repo/semantics/article | |
| dc.type.version | info:eu-repo/semantics/acceptedVersion | |
| dspace.entity.type | Publication | |
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