The Evergreening

• 成果类型: Article
• 署名作者: Faria-e-Castro, Miguel; Paul, Pascal; Sanchez, Juan M.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - St. Louis; Federal Reserve System - USA; Federal Reserve Bank - San Francisco; Goethe University Frankfurt
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103778
• 发表日期: 2024
• 关键词: Evergreening; Zombie firms; Bank lending; misallocation

摘要

We develop a simple model of concentrated lending where lenders have incentives for evergreening loans by offering better terms to firms that are close to default. We detect such lending behavior using loan -level supervisory data for the United States. Banks that own a larger share of a firm's debt provide distressed firms with relatively more credit at lower interest rates. Building on this empirical validation, we incorporate theoretical mechanism into a dynamic heterogeneous -firm model to show that evergreening affects aggregate outcomes, resulting in lower interest rates, higher levels of debt, and lower productivity.