A Dynamic Model of Optimal Creditor Dispersion

• 成果类型: Article
• 署名作者: Zhong, Hongda
• 署名单位: University of London; London School Economics & Political Science
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12974
• 发表日期: 2021
• 页码: 267-316
• 关键词: LENDING RELATIONSHIPS; capital structure; short-term; debt; multiple; PRIVATE; RENEGOTIATION; INFORMATION; CONTRACTS; maturity

摘要

Borrowing from multiple creditors exposes firms to rollover risk due to coordination problems among creditors, but it also improves firms' repayment incentives, thereby increasing pledgeability. Based on this trade-off, I develop a dynamic debt rollover model to analyze the evolution of creditor dispersion. Consistent with empirical evidence, I find that firms optimally increase creditor dispersion after poor performance. In contrast, cross-sectionally higher-growth firms can support more dispersed creditors. Frequent debt renegotiation limits firms' ability to increase pledgeability by having more creditors. Finally, holding a cash balance while borrowing from multiple creditors improves firms' repayment incentives uniformly across all future states.