Results 121 to 130 of about 220,317 (159)

A Theory of Zombie Lending

Journal of Finance, 2021
ABSTRACTAn entrepreneur borrows from a relationship bank or the market. The bank has a higher cost of capital but produces private information over time. While the entrepreneur accumulates reputation as the lending relationship continues, asymmetric information is also developed between the bank/entrepreneur and the market.
Yunzhi Hu, Felipe Varas
exaly   +3 more sources

Weak Corporate Insolvency Rules: The Missing Driver of Zombie Lending

AEA Papers and Proceedings American Economic Association, 2022
“Zombie lending”--lending to less-productive firms at subsidized rates--can help banks with misaligned incentives in the short run, but it prolongs economic downturns. We propose that inefficient resolution of insolvency is a significant contributor to this problem.
Bo Becker, Victoria Ivashina, Becker Bo   +2 more
exaly   +3 more sources

Throwing good money after bad: Zombie lending and the supply chain contagion of firm exit

Journal of Economic Behavior and Organization, 2021
Abstract This paper studies whether the bailout of downstream firms helps stop the supply chain propagation of business failure. By analyzing persistent zombie lending in China, we show that such a bailout policy does not work. Zombie lending to downstream firms does not reduce the exit likelihood of upstream firms.
Xuchao Li, Dinghua Liu, Jiankun Lu
exaly   +3 more sources

Unintended consequences of the introduction of specialized bankruptcy courts: evidence from zombie lending

International Review of Financial Analysis
Chun Liu, Shilin Liang, Liang Sun
exaly   +3 more sources

Zombie-lending during the pandemic in India: Did the Central Bank reduce credit misallocation concerns of forbearance?

Journal of Policy Modeling
Prasenjit Chakrabarti, Jasmeet Kaur
exaly   +3 more sources

Distressed firms, zombie firms and zombie lending: A taxonomy

Journal of Banking & Finance, 2021
Laura Álvarez Román, Miguel García-Posada, Sergio Mayordomo   +2 more
openaire   +2 more sources

Identifying Zombie Lending: Evidence Using Loan-Level Data

SSRN Electronic Journal, 2018
We identify ever-greening motivated by loan officer incentives. We devise a novel zombie lending measure in a setting dominated by non-verifiable information. We identify loans that are renewed quickly after repayment of the previous loan, where the same officer is in charge during the issuance of both loans, and transactions are consummated close to ...
Prasanna Tantri
openaire   +2 more sources

The Role of Bank CEOs in Zombie Lending During a Crisis: Evidence from India

Journal of Financial and Quantitative Analysis
Abstract A well-documented pattern of bank lending during crises is allocating credit to insolvent firms at the expense of productive firms, leading to inefficient resource allocation at the macro level. I investigate the role of bank CEOs in influencing such distortions during crises, using the strictly enforced age-based retirement ...
Prasanna Tantri
openaire   +2 more sources

Dual holders, risk shifting, and zombie lending

2015
This paper provides a model to analyze a recently documented empirical phenomenon, the investors’ simultaneous holding of equity and debt stakes in one firm. The model formalizes the idea that the existence of a dual holder could effectively reconcile the conflicts between debt holders and shareholders and improve firm values.
Fangyuan Ma
openaire   +3 more sources

Zombie Lending: Theoretical, International, and Historical Perspectives

Annual Review of Financial Economics, 2022
Sascha Steffen
exaly   +2 more sources