Vintage capital and creditor protection

Efraim Benmelech and Nittai K. Bergman

Journal of Financial Economics, 2011, vol. 99, issue 2, 308-332

Abstract: We provide novel evidence linking the level of creditor protection provided by law to the degree of usage of technologically older, vintage capital in the airline industry. Using a panel of aircraft-level data around the world, we find that better creditor rights are associated with both aircraft of a younger vintage and newer technology, as well as firms with larger aircraft fleets. We propose that by mitigating financial shortfalls, enhanced legal protection of creditors facilitates the ability of firms to make large capital investments, adapt advanced technologies, and foster productivity.

Keywords: Asset-backed; securities; Bankruptcy; Collateral; Contagion (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (25)

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Working Paper: Vintage Capital and Creditor Protection (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:99:y:2011:i:2:p:308-332

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