Abstract
The paper deals with an entrepreneur who operates in imperfect capital markets, making rational decisions about productive and financial investment. Using the economic rule that the allocation of assets between productive and financial purposes is carried out according to the equality of the marginal productivity and the marginal factor costs of debt, the paper analyses the factors which determine the size of the firm, the size of debt, and the optimal dynamic path.
| Original language | English |
|---|---|
| Pages (from-to) | 67-83 |
| Number of pages | 17 |
| Journal | European Economic Review |
| Volume | 4 |
| Issue number | 1 |
| DOIs | |
| State | Published - Apr 1973 |
| Externally published | Yes |
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