Financial Contract and the Locality of Informal Financial Market
金融契约与民间金融市场的局部性

This paper proposes an incomplete financial contract model and studies what factors affect the financing and locality of an informal financial market.We show that the size of an informal financial market increases with the entrepreneur's initial wealth,project's technological efficiency,probability of success of a good project,outside investor's wealth,and local factors like social conventions,culture and norms.The size decreases under a risk-free interest rate,or when a project's funds can be easily divert...