Empirical analysis of corporate credit lines
AbstractSince bank credit lines are a major source of corporate funding, we examine the determinants of credit line usage with a comprehensive database of Spanish corporate credit lines. A line’s default status is a key factor driving its usage, which increases as a firm’s financial condition worsens. Line usage decreases by roughly 10% for each year of its life. Lender characteristics, such as the number and length of a firm’s banking relationships, are found to affect a firm’s usage decisions, and credit line usage is found to be inversely related to macroeconomic conditions.
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Bibliographic InfoPaper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0821.
Length: 35 pages
Date of creation: Oct 2008
Date of revision:
credit lines; firm default; bank lending; exposure at default;
Other versions of this item:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-07 (All new papers)
- NEP-BAN-2008-10-07 (Banking)
- NEP-BEC-2008-10-07 (Business Economics)
- NEP-MAC-2008-10-07 (Macroeconomics)
- NEP-RMG-2008-10-07 (Risk Management)
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