Empirical Analysis of Corporate Credit Lines
Preprint
- 2 October 2008
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
Since 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.Keywords
This publication has 49 references indexed in Scilit:
- Does Bank Monitoring Influence Loan Contract Terms?Journal of Financial Services Research, 2006
- Switching costs and adverse selection in the market for credit cards: New evidenceJournal of Banking & Finance, 2006
- Credit Lines and Credit UtilizationJournal of Money, Credit and Banking, 2006
- Loan Commitments and Private FirmsSSRN Electronic Journal, 2004
- Asset liquidity, debt covenants, and managerial discretion in financial distress:: the collapse of L.A. GearPublished by Elsevier ,2002
- Bank Relationships and Firm ProfitabilityFinancial Management, 2001
- The Determinants of Contract Terms in Bank Revolving Credit AgreementsJournal of Financial and Quantitative Analysis, 2000
- Relationship Banking: What Do We Know?Journal of Financial Intermediation, 2000
- Relationship Lending and Lines of Credit in Small Firm FinanceThe Journal of Business, 1995
- Moral Hazard and Secured Lending in an Infinitely Repeated Credit Market GameInternational Economic Review, 1994