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Online Reputation and Debt Capacity


  • François Derrien

    (Rotman School of Management, University of Toronto - University of Toronto, HEC Paris - Ecole des Hautes Etudes Commerciales)

  • Alexandre Garel

    (Audencia Business School)

  • Arthur Petit-Romec

    (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne)

  • Jean-Philippe Weisskopf


This paper explores the effects of online customer ratings on debt capacity. Using a large sample of Parisian restaurants, we find a positive and economically significant relation between customer ratings and bank debt. We use the locally exogenous variation in customer ratings resulting from the rounding of scores in regression discontinuity tests to establish causality. Customer ratings affect financial policy through a reduction in cash flow risk and higher resilience to demand shocks. Restaurants with good ratings use their extra debt capacity to invest in tangible assets. Finally, favorable online ratings relax credit constraints mostly for moderately constrained restaurants.

Suggested Citation

  • François Derrien & Alexandre Garel & Arthur Petit-Romec & Jean-Philippe Weisskopf, 2020. "Online Reputation and Debt Capacity," Working Papers hal-02896691, HAL.
  • Handle: RePEc:hal:wpaper:hal-02896691
    DOI: 10.2139/ssrn.3538313

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    Cited by:

    1. Ke & Ma & Sophie Yanying Sheng & Haitian Xie, 2023. "Employer Reputation and the Labor Market: Evidence from and," Papers 2305.02587,, revised Sep 2023.


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