The Origin of the Capitalist Firm by Weiying Zhang

Author:Weiying Zhang
Language: eng
Format: epub
Publisher: Springer Singapore, Singapore

(3.20)

That is, the expected marketing ability of this group cannot be greater than in the case where the contractual return for lending is riskless ().

For a potential lender, the possibility of holding wealth instead of lending out implies that the following condition must hold for lending to take place:

(3.21)

Thus, a necessary (but not sufficient) condition for a potential lender to meet the would-be entrepreneur’s borrowing requirement is

(3.22)

By rearranging (3.22), we have

(3.23)

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