Financing Strategies in Transitioning Economies

Lewellen, Wilbur G.; Long, Michael S.
September 1999
Multinational Business Review (St. Louis University);Fall99, Vol. 7 Issue 2, p89
Academic Journal
Because of the presence of substantial informational asymmetries between borrowers and lenders, and an incomplete legal framework dealing with creditors' rights and bankruptcy, many debt financing vehicles which are used in developed market economies are poorly suited to economies that are in the transition from being centrally-planned to marketdriven. Our analysis indicates that asset leasing is an effective and efficient solution to the financing needs of borrowers in such countries, in that it lowers the risks and monitoring costs borne by lenders as compared with more traditional loans.


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