Collateral damaged? Priority structure,credit supply,and firm performance |
| |
| Institution: | 1. Católica-Lisbon School of Business and Economics, Palma de Cima, 1649-023 Lisbon, Portugal;2. Department of Banking and Finance, University of Zürich (UZH), Plattenstrasse 32, CH-8032 Zürich, Switzerland;3. Swiss Finance Institute, Switzerland;4. KU Leuven, Belgium;5. CEPR, United Kingdom;6. Research Department, Norges Bank, P.O. Box 1179 Sentrum, N-0107 Oslo, Norway;7. University of Groningen, Netherlands;8. Sveriges Riksbank, 10337 Stockholm;1. Banco de Portugal, Economics and Research Department, Av, Almirante Reis 71, 1150-015 Lisbon, Portugal;1. ALBA Graduate Business School, The American College of Greece, 6-8 Xenias Str, 11528 Athens, Greece;2. Bank of Greece, 21 E. Venizelos Ave., 10250 Athens, Greece;3. University of Piraeus, Department of Banking and Financial Management, 80 Karaoli & Dimitriou str., 18534 Piraeus, Greece;4. Surrey Business School, University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom;1. Lumsa University, Rome;2. Michigan State University, Department of Economics, Marshall-Adams Hall, 486 W Circle Dr. Rm 110, East Lansing, MI 48824, USA;3. Luiss University, Rome;1. International Monetary Fund, Statistics Department, 1900 Pennsylvania Ave NW, 20431 USA;2. Department of Economics, Columbia University, 420 W. 118th Street, New York, NY 10027, United States |
| |
| Abstract: | A unique legal reform in 2004 in Sweden redistributed collateral rights from banks holding floating liens to unsecured creditors without changing the value of assets on firms’ balance sheets. Using a country-wide panel of all incorporated firms, we document that a zero-sum redistribution of collateral rights and the resulting reduction in collateral capacity towards banks contracts the amount and maturity of corporate debt and leads firms to slow investment and forego growth. Altering their allocation of assets, firms reduce particularly those assets with a low collateralizable value for banks and also hoard more cash. However, the reform has no impact on corporate capital intensity or efficiency, suggesting that under these newly binding credit constraints firms simply shrink their operations. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
