Private debt renegotiation, corporate policies, and performance: empirical evidence from Europe

Christophe Godlewski

Applied Economics, 2023, vol. 55, issue 51, 6004-6024

Abstract: We investigate the effects of private debt renegotiation on a firm’s performance and financial and investment policies. We employ endogenous switching regressions using a large cross-country sample of loans issued and amended over a long-term in Europe. We find that bank loan renegotiation has an economically significant and causal impact on financial policy and performance. Renegotiation offers firm added degrees of freedom and unlocks its economic potential, implying significant effects of the firm’s tangibility, growth, opportunities, and cash on financial policy and performance. Bank loan renegotiation also shows a certification and signalling effect, which can increase the effect of amendments to the credit agreement on a firm’s financial policy.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2022.2141445 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Private debt renegotiation, corporate policies, and performance: empirical evidence from Europe (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:55:y:2023:i:51:p:6004-6024

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2022.2141445

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().