Repayment versus Investment Conditions and Exclusivity in Lending Contracts
AbstractLenders condition future loans on some index of past performance. Typically, banks condition future loans on repayments of earlier obligations whilst international organizations (official lenders) condition future loans on the implementation of some policy action (‘investment’). We build an agency model that accounts for these tendencies. The optimal conditionality contract depends on exclusivity – the likelihood that a borrower who has been denied funds from the original lenders can access funds from other lenders.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4604.
Length: 26 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Journal of Institutional and Theoretical Economics, 2011, 167 (2), 247-265.
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Other versions of this item:
- Spiros Bougheas & Indraneel Dasgupta & Oliver Morrissey, 2011. "Repayment versus Investment Conditions and Exclusivity in Lending Contracts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(2), pages 247-265, June.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-BAN-2010-01-10 (Banking)
- NEP-CFN-2010-01-10 (Corporate Finance)
- NEP-CTA-2010-01-10 (Contract Theory & Applications)
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- Burger, Ronelle & Dasgupta, Indraneel & Owens, Trudy, 2011.
"A Model of NGO Regulation with an Application to Uganda,"
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6221, Institute for the Study of Labor (IZA).
- Ronelle Burger & Indraneel Dasgupta & Trudy Owens, 2011. "A Model of NGO Regulation with an Application to Uganda," Working Papers 22/2011, Stellenbosch University, Department of Economics.
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