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How do private firms use credit lines?

Author

Listed:
  • Sumit Agarwal
  • Souphala Chomsisengphet
  • John C. Driscoll

Abstract

The authors find that firms that face higher upfront commitment fees, risk premium spreads or usage fees have smaller credit lines, while those with higher overdraft fees have larger ones. Firms with greater profit growth in the past have larger credit lines, while those with more internal funds or higher volatility in profit growth have smaller credit lines. The results for line utilization are quite similar.

Suggested Citation

  • Sumit Agarwal & Souphala Chomsisengphet & John C. Driscoll, 2011. "How do private firms use credit lines?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 71-79.
  • Handle: RePEc:fip:fedhep:y:2011:i:qii:p:71-79:n:v.35no.2
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    References listed on IDEAS

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    Cited by:

    1. Russell Wong & Cathy Zhang & Guillaume Rocheteau, 2017. "Lending Relationships, Banking Crises and Optimal Monetary Policies," 2017 Meeting Papers 152, Society for Economic Dynamics.

    More about this item

    Keywords

    Corporations - Finance ; Credit ; Loans;

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