Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5089149 | Journal of Banking & Finance | 2013 | 19 Pages |
Abstract
However, the one area of concern that persists after a filing is financing or credit access. In general, these firms have a nearly 24 percentage point higher likelihood of being denied a loan and are charged interest rates that are more than 1 percentage point higher than those charged to other businesses. A bankruptcy affects all types of financing, even trade credit, which is a significant form of lending between businesses. In fact, it appears that firms with a bankruptcy record are rationed out of the market, with all types of loans being denied at significantly higher rates than other firms. Further, my results show that bankruptcy leads to a class of discouraged borrowers who are significantly less likely to even apply for a loan.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Aparna Mathur,