Debt Overhang and Barter in Russia

Sergei Guriev, Igor Makarov and Mathilde Maurel
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Igor Makarov: MIT Sloan - Sloan School of Management - MIT - Massachusetts Institute of Technology

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Abstract: This paper develops a model in which costly barter is used by firms to protect working capital against outside creditors. Although creditors could agree to postpone debt payments and to avoid destroying the firm's working capital, if the firm cannot commit not to divert cash ex post, the outcome of renegotiation still provides ex ante incentives to use barter. We show that the greater is the debt overhang, the more likely is the use of barter, with and without the possibility of debt restructuring. Empirical evidence from Russian firm-level data is shown to be consistent with the model's predictions.

Keywords: Debt; Russia (search for similar items in EconPapers)
Date: 2002-12
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Citations: View citations in EconPapers (6)

Published in Journal of Comparative Economics, 2002, 30 (4), pp.635-656. ⟨10.1006/jcec.2002.1797⟩

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Related works:
Journal Article: Debt Overhang and Barter in Russia (2002)
Working Paper: Debt Overhang and Barter in Russia (2002)
Working Paper: Debt Overhang and Barter in Russia (2002)
Working Paper: Debt Overhang and Barter in Russia (2002)
Working Paper: Debt Overhang and Barter in Russia (2002)
Working Paper: Debt Overhang and Barter in Russia (2001)
Working Paper: Debt Overhang and Barter in Russia (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00468633

DOI: 10.1006/jcec.2002.1797

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