Vintage Capital and Creditor Protection

Efraim Benmelech and Nittai K. Bergman

No 15735, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E22 E44 G32 G33 L93 (search for similar items in EconPapers)
Date: 2010-02
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Published as Benmelech, Efraim & Bergman, Nittai K., 2011. "Vintage capital and creditor protection," Journal of Financial Economics, Elsevier, vol. 99(2), pages 308-332, February.

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Journal Article: Vintage capital and creditor protection (2011)
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