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Vintage Capital and Creditor Protection

  • Efraim Benmelech
  • Nittai K. Bergman

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15735.

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Date of creation: Feb 2010
Date of revision:
Publication status: 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.
Handle: RePEc:nbr:nberwo:15735
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