nep-cfn New Economics Papers
on Corporate Finance
Issue of 2022‒08‒08
two papers chosen by
Zelia Serrasqueiro
Universidade da Beira Interior

  1. Debt Dynamic, Debt Dispersion and Corporate Governance By Tut, Daniel
  2. Green credit policy and total factor productivity: Evidence from Chinese listed companies By Shu Guo; ZhongXiang Zhang

  1. By: Tut, Daniel
    Abstract: Why do some firms borrow from multiple creditors and employ multiple debt types? This paper shows that entrenched managers exploit coordination failure and free-riding problem amongst multiple creditors. [1] We find that managerial entrenchment is inversely related to debt specialization and creditors concentration. [2] We find that firms under entrenched management have a higher proclivity to employ multiple debt types and have a dispersed debt structure. Firms that are well-managed have a tendency to concentrate debt and borrow predominantly from a few creditors. [3] We also show that while bank debt is negatively related to debt specialization, market debt is positively related to debt specialization. Overall, our findings suggest that creditors can discipline managers through debt specialization.
    Keywords: Ownership structure, corporate governance, debt specialization, banks, debt structure, debt types
    JEL: G00 G2 G31 G32 G33 G34 G35
    Date: 2022–06–18
  2. By: Shu Guo (Ma Yinchu School of Economics, Tianjin University and China Academy of Energy, Environmental and Industrial Economics); ZhongXiang Zhang (Ma Yinchu School of Economics, Tianjin University and China Academy of Energy, Environmental and Industrial Economics)
    Abstract: The green credit policy plays a vital role in promoting enterprise upgrading. Using a thirteen year panel data of listed companies in China (2007 2019), this study uses the difference in differences (DID) method to examine the effects of the Green Credit Guidelines in 2012 (GCG2012) on the firm level total factor productivity (TFP). Our results show that the GCG2012 significantly increases the TFP of companies in green credit restricted industries. This finding remains robust through employing the PSM-DID model, alternating the treatment group, changing the sample period, and controlling the effects of other environmental policies and financial crises. This effect is more pronounced for private enterprises, companies with worse debt paying ability, companies in highly competitive industries and companies in regions with higher financial liberalization. The impact mechanism test indicates that increasing the green innovation and reducing the agency costs (including green agency costs and traditional agency costs) are two possible channels to boost firm level TFP. Further analysis shows that the GCG2012 is effective not only for heavily polluting industries but also for light polluting industries, and that the GCG2012 can improve the economic performance of firms in green credit restricted industries. Overall, this study reveals the micro mechanisms behind the long term impact of the GCG2012 policy on firm level TFP, providing empirical evidence and policy suggestions for improving green credit policies and promoting green development.
    Keywords: Green credit policy, green finance, total factor productivity, PSM-DID model, China
    JEL: Q48 Q53 Q55 Q58 O13 P28 R11 H23
    Date: 2022–05

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