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Natural disasters and firm leasing: A collateral channel

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  • Wang, Jiawei (Brooke)

Abstract

This paper studies the role of lease financing in disaster-affected firms under collateral constraints. Disaster-affected firms demand funds for post-disaster reconstruction. However, the destruction of natural disasters leads to collateral constraints, which create external financing frictions. I find that affected firms obtain financing through operating leases after natural disasters. The significance of the findings highlights the importance of operating leases for collateral-constrained firms.

Suggested Citation

  • Wang, Jiawei (Brooke), 2023. "Natural disasters and firm leasing: A collateral channel," Journal of Corporate Finance, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:corfin:v:82:y:2023:i:c:s0929119923000779
    DOI: 10.1016/j.jcorpfin.2023.102428
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    More about this item

    Keywords

    Natural disasters; Leasing; Collateral constraints; Financing frictions;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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