Credit Ratings and the Hold-Up Problem in the Loan Market

• 成果类型: Article
• 署名作者: Cahn, Christophe; Girotti, Mattia; Salvade, Federica
• 署名单位: European Central Bank; Bank of France
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4779
• 发表日期: 2024
• 页码: 1810-1831
• 关键词: Relationships; hold-up problem; switching costs; Private Firms; Credit ratings

摘要

This paper studies whether credit ratings can alleviate the hold-up problem in the loan market. We exploit a refinement of the rating information produced by a certifier that rates private bank-dependent firms in France on a vast scale. The refinement causes some firms to receive a positive rating surprise that is not due to an improvement in firm fundamentals. We show that affected firms become less reliant on lenders that have greater ability to extract informational rents. These firms receive greater and less expensive bank credit from new and less informed lenders and invest more. We deduce that credit ratings reduce the monopoly power of informed banks, helping firms to expand their access to bank credit.