Public versus Private Borrowing: A Theory with Implications for Bankruptcy Reform
构建了一个企业同时使用公共和私人债务融资的模型，分析两种债务在破产重组中的不同可协商性对投资效率的影响，并比较不同破产制度的福利效果，为美国破产法第11章改革提供建议。
A model is presented in which firms optimally finance investment with both public and private debt. The two instruments are perfect substitutes, except that private debt can easily be renegotiated in insolvency states while public debt cannot. The option to renegotiate is beneficial ex post, as it allows the firm to avoid inefficient liquidation, but ex ante it may worsen asset substitution. The welfare effects of alternative bankruptcy regimes are then compared, taking into account that firms modify their financing decision in response to the regime change. Some suggestions for reforming Chapter 11 of the U.S. bankruptcy code are presented. Journal of Economic Literature Classification Numbers: G32, G33, K2.