Abstract
Converse selection is the phenomenon commonly existing in the market, and its connotation is the asymmetry of information. Converse selection influences the trading between two or among above two different individuals or enterprises. Enterprise financing comes down to the trading between at least two different enterprises such as the financing party and the loan party, i.e. the behavior of converse selection influences the enterprise financing, and under different financing modes, these influences are different, which can be better opened out by the game analysis. And the theory of signal can be used to reduce or eliminate the bad influences on the enterprise financing brought by the behavior of converse selection.
Highlights
The exterior financing of the enterprise includes the direct financing and the indirect financing
Because the interior financing can be regarded as the interior business of the enterprise, and it doesn’t relate to the relationships of the enterprise with other parties, so the relationship between converse selection and interior financing is not discussed in the article, but the influences of converse selection on direct financing and indirect financing
The income of good enterprise exceeds the income of bad enterprise, and the stock issuance cost of good enterprise is less than bad enterprise, and the investment income of good enterprise is better than bad enterprise, i.e. Rg > Rb, Cg < Cb and Vg > Vb
Summary
Three modes of enterprise financing are the interior financing, the direct financing and the indirect financing. Because the interior financing can be regarded as the interior business of the enterprise, and it doesn’t relate to the relationships of the enterprise with other parties, so the relationship between converse selection and interior financing is not discussed in the article, but the influences of converse selection on direct financing and indirect financing
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