The enlargement of the general-equilibrium structure to allow for default subject to appropriate credit limits and default penalties results in a construction of a simple mechanism for a credit using society. We show that there generically exists a price-normalizing bundle that determines a credit money along with appropriate credit limits and default penalties for the credit mechanism to selec...

Getting loans from banks are almost impossible after 2008 global financial crisis. As a result, about 80% of companies in United Kingdom and United States offer their products on various short-term, free-interest loans (i.e., trade credit) to customers. Numerous researchers and academicians apply discounted cash flow (DCF) analysis merely to compute the interest earned and charged during the cr...

The main purpose of this paper is to present the empirical findings derived from the data of small firms that the availability of private and public information on the borrowing firm leads to diverse borrowing patterns among firms. Exploring logit models to characterize the firm’s choice of a financial source, we find that firms whose information is poorly recorded, or who are publicly less rec...

This paper tries to incorporate both Chung and Huang (2003b) and Huang and Chung (2003) to develop the buyer’s inventory model. That is, we want to investigate the buyer’s optimal cycle time and optimal payment time under supplier’s trade credit policy and cash discount policy. Mathematical models have been derived for obtaining the optimal cycle time and optimal payment time for item under sup...