Abstract
This article reviews literature on the important role played by asymmetric information in entrepreneurial finance from two perspectives: asymmetric information and relationship lending, and the theoretical modeling of asymmetric information. Then it examines the relationship between capital market conditions and entrepreneurial finance and attempts to answer two questions: Why is the capital market condition important for entrepreneurial finance? and What are the effects of capital market conditions on entrepreneurial financial behavior in terms of discouraged borrowers, cash holding, and the availability and costs of finance?
| Original language | English |
|---|---|
| Title of host publication | The Oxford Handbook of Entrepreneurial Finance |
| Editors | Douglas Cumming |
| Publisher | Oxford University Press |
| Pages | 341-365 |
| DOIs | |
| Publication status | Published - Sept 2012 |