Credit in the Production Organization of the Firm

摘要: EACH firm has a financial component as well nonfinancial components. The includes claims held and debts owed, values reported in balance sheet of the firm. A less evident part is liquidity firm: access to assets terms on which such may be gained. Profit-seeking managers are willing pay for more or tangible terms. most tangible, perhaps, found insurance. second choices made that favor liquid relative illiquid flexibly managed inflexible debt commitments. third reservation "credit"-credit defined capacity borrow. Unused credit, like liquid, constitute reserve can called upon counter effects failure expectations. Though not included sheet, also value. In this article, I outline value, form "credit," production organization stress fact attached unused portion "credit." To exchange credit loan generates cost interest. entails loss liquidity. How costly it lose depends total available entrepreneur alternative sources any event, argue "credit" an asset managed-made grow, decline, change structureand results important t Ideas contained article were assembled seminars conducted at Universities Sydney, Melbourne, Adelaide, Western Australia (Perth) Australian National University 1967. However, their origin research earlier Illinois. Thanks due especially G. D. Irwin, E. Neuman, L. F. Rogers early testing utility notion lender preferences staff students various universities criticisms broader frame reference cast. Finally, am grateful comments from two anonymous Journal reviewers.