Drilling and Debt

• 成果类型: Article
• 署名作者: Gilje, Erik P.; Loutskina, Elena; Murphy, Daniel
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; University of Virginia
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12884
• 发表日期: 2020
• 页码: 1287-1325
• 关键词: investment; credit; RENEGOTIATION; determinants; leverage; default; finance; FIRMS

摘要

This paper documents a previously unrecognized debt-related investment distortion. Using detailed project-level data for 69 firms in the oil and gas industry, we find that highly levered firms pull forward investment, completing projects early at the expense of long-run project returns and project value. This behavior is particularly pronounced prior to debt renegotiations. We test several channels that could explain this behavior and find evidence consistent with equity holders sacrificing long-run project returns to enhance collateral values and, by extension, mitigate lending frictions at debt renegotiations.