Access to Collateral and Corporate Debt Structure: Evidence from a Natural Experiment

• 成果类型: Article
• 署名作者: Vig, Vikrant
• 署名单位: University of London; London Business School
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12020
• 发表日期: 2013
• 页码: 881-928
• 关键词: capital structure; FINANCIAL CONTRACTS; liquidation values; BANKRUPTCY CODES; Agency problems; credit; maturity; REFORM; COSTS

摘要

We investigate how firms respond to strengthening of creditor rights by examining their financial decisions following a securitization reform in India. We find that the reform led to a reduction in secured debt, total debt, debt maturity, and asset growth, and an increase in liquidity hoarding by firms. Moreover, the effects are more pronounced for firms that have a higher proportion of tangible assets because these firms are more affected by the secured transactions law. These results suggest that strengthening of creditor rights introduces a liquidation bias and documents how firms alter their debt structures to contract around it.