Do liquidation values affect financial contracts? Evidence from commercial loan contracts and zoning regulation

• 成果类型: Article
• 署名作者: Benmelech, E; Garmaise, MJ; Moskowitz, TJ
• 署名单位: Harvard University; University of California System; University of California Los Angeles; University of Chicago; National Bureau of Economic Research
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/120.3.1121
• 发表日期: 2005
• 页码: 1121-1154
• 关键词: capital structure; asset ownership; debt; LAND; INFORMATION; MARKETS; ENFORCEMENT; number

摘要

We examine the impact of asset liquidation value on debt contracting using a unique set of commercial property loan contracts. We employ commercial zoning regulation to capture the flexibility of a property's permitted uses as a measure of an asset's redeployability or value in its next best use. Within a census tract, more redeployable assets receive larger loans with longer maturities and durations, lower interest rates, and fewer creditors, controlling for the property's type, sale price, and earnings-to-price ratio. These results are consistent with incomplete contracting and transaction cost theories of liquidation value and financial structure.