Creditor Rights, Information Sharing, and Borrower Behavior: Theory and Evidence

John H. Boyd (), Hendrik Hakenes () and Amanda Heitz ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: This paper provides a comprehensive theoretical and empirical analysis of "creditor rights" and "information sharing" throughout over 1.8 million private firms in Europe. We show that many of the outcomes associated with greater levels of creditor rights can be obtained with higher information sharing between banks. Both theory and empirics show that creditor rights and information sharing are associated with greater firm leverage, lower profitability, and greater distance to default. Moreover, theory and empirics find that creditor rights and information sharing are robust substitutes. Our analysis suggests that poor creditor rights can be substituted by improved information sharing.

Keywords: Creditor rights; information sharing (search for similar items in EconPapers)
JEL-codes: G21 G28 L15 (search for similar items in EconPapers)
Pages: 65
Date: 2018-10
New Economics Papers: this item is included in nep-ban and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2018_046

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