Skip to main content

Financing durable assets

Publication ,  Journal Article
Rampini, AA
Published in: American Economic Review
February 1, 2019

This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than their collateral value. Durability affects technology adoption, the choice between new and used capital, and the rent versus buy decision. Constrained firms invest in less durable assets and buy used assets. More durable assets are more likely to be rented. Economies with weak legal enforcement invest more in less durable, otherwise dominated assets and are net importers of used assets.

Duke Scholars

Altmetric Attention Stats
Dimensions Citation Stats

Published In

American Economic Review

DOI

EISSN

1944-7981

ISSN

0002-8282

Publication Date

February 1, 2019

Volume

109

Issue

2

Start / End Page

664 / 701

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Rampini, A. A. (2019). Financing durable assets. American Economic Review, 109(2), 664–701. https://doi.org/10.1257/aer.20170995
Rampini, A. A. “Financing durable assets.” American Economic Review 109, no. 2 (February 1, 2019): 664–701. https://doi.org/10.1257/aer.20170995.
Rampini AA. Financing durable assets. American Economic Review. 2019 Feb 1;109(2):664–701.
Rampini, A. A. “Financing durable assets.” American Economic Review, vol. 109, no. 2, Feb. 2019, pp. 664–701. Scopus, doi:10.1257/aer.20170995.
Rampini AA. Financing durable assets. American Economic Review. 2019 Feb 1;109(2):664–701.

Published In

American Economic Review

DOI

EISSN

1944-7981

ISSN

0002-8282

Publication Date

February 1, 2019

Volume

109

Issue

2

Start / End Page

664 / 701

Related Subject Headings

  • Economics
  • 38 Economics
  • 35 Commerce, management, tourism and services
  • 15 Commerce, Management, Tourism and Services
  • 14 Economics