Network-Motivated Forbearance Lending

• 成果类型: Article; Early Access
• 署名作者: Ogura, Yoshiaki; Okui, Ryo; Saito, Yukiko Umeno
• 署名单位: Waseda University; University of Tokyo
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.00459
• 发表日期: 2025
• 关键词: supply network; influence coefficient; Forbearance; Bailout

摘要

This paper develops a theoretical framework for network-motivated forbearance lending, or forbearance lending to influential buyers and sellers in a supply network. Because dominant banks in a financial market internalize the negative externality of an influential firm's exit, they may continue to refinance a loss-making influential firm at an interest rate lower than the prime rate. This type of forbearance lending is distinct from other strategies such as evergreening or gambling for resurrection, and we show that networkmotivated forbearance lending is independent of the financial soundness of the bank and can be welfare improving. To evaluate the extent of the externality of an influential seller or buyer, we propose two measures: the price influence coefficient and the demand influence coefficient, respectively.