Uncertainty, access to debt, and firm precautionary behavior

• 成果类型: Article
• 署名作者: Favara, Giovanni; Gao, Janet; Giannetti, Mariassunta
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; Indiana University System; Indiana University Bloomington; Stockholm School of Economics; Centre for Economic Policy Research - UK; European Corporate Governance Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.04.010
• 发表日期: 2021
• 页码: 436-453
• 关键词: Anti-recharacterization laws; SPVs; Creditor rights; cash; Intangible assets; Geopolitical Risk; political uncertainty

摘要

Better access to debt markets mitigates the effects of uncertainty on corporate policies. We establish this result using the staggered introduction of anti-recharacterization laws in US states. These laws enhanced firms' ability to borrow by strengthening creditors' rights to repossess collateral pledged in special purpose vehicles. After the passage of the laws, firms that face more uncertainty hoard less cash and increase payouts, leverage, and investment in intangible assets. Our findings suggest that better access to debt markets shields firms from fluctuations in uncertainty and decreases firms' precautionary behavior, contributing to the deployment of cash and other internal resources to investment in intangible capital. (C) 2021 The Author(s). Published by Elsevier B.V.