Creditor Rights, Technology Adoption, and Productivity: Plant-Level Evidence
Working Papers from U.S. Census Bureau, Center for Economic Studies
I analyze the impact of stronger creditor rights on productivity using plant-level data from the U.S. Census Bureau. Following the adoption of anti-recharacterization laws that give lenders greater access to the collateral of firms in financial distress, total factor productivity of treated plants increases by 2.6 percent. This effect is mainly observed among plants belonging to financially constrained firms. Furthermore, treated plants invest in capital of younger vintage and newer technology, and become more capital-intensive. My results suggest that stronger creditor rights relax borrowing constraints and help firms adopt more efficient production technologies.
Keywords: Creditor Rights; Technology Adoption; Productivity; Bankruptcy (search for similar items in EconPapers)
JEL-codes: D24 G32 G33 K22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-eff, nep-ino and nep-law
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https://www2.census.gov/ces/wp/2018/CES-WP-18-20.pdf First version, 2018 (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:18-20
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