Who Finances Durable Goods and Why It Matters: Captive Finance and the Coase Conjecture

• 成果类型: Article
• 署名作者: Murfin, Justin; Pratt, Ryan
• 署名单位: Brigham Young University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12745
• 发表日期: 2019
• 页码: 755-793
• 关键词: trade credit

摘要

We propose that, by financing their own product sales through captive finance subsidiaries, durable goods manufacturers commit to higher resale values for their products in future periods. Using data on captive financing by the manufacturers of heavy equipment, we find that captive-backed models have lower price depreciation. The evidence is consistent with captive finance helping manufacturers commit to ex-post actions that support used machine prices. This, in turn, conveys higher pledgeability for captive-backed products, even for individual machines financed by banks. Although motivated as a rent-seeking device, captive financing generates positive spillovers by relaxing credit constraints.