Collateral, Risk Management, and the Distribution of Debt Capacity

• 成果类型: Article
• 署名作者: Rampini, Adriano A.; Viswanathan, S.
• 署名单位: Duke University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2010.01616.x
• 发表日期: 2010
• 页码: 2293-2322
• 关键词: competitive equilibria; security design; continuous-time; INVESTMENT; default; MARKET; AGENCY

摘要

Collateral constraints imply that financing and risk management are fundamentally linked. The opportunity cost of engaging in risk management and conserving debt capacity to hedge future financing needs is forgone current investment, and is higher for more productive and less well-capitalized firms. More constrained firms engage in less risk management and may exhaust their debt capacity and abstain from risk management, consistent with empirical evidence and in contrast to received theory. When cash flows are low, such firms may be unable to seize investment opportunities and be forced to downsize. Consequently, capital may be less productively deployed in downturns.