A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2016; you can also visit the original URL.
The file type is
Collateral Damage? On Collateral, Corporate Financing and Performance
Social Science Research Network
In this paper, we investigate the economy-wide effects of the collateral channel by exploiting: (i) a legal reform in Sweden in 2004 that reduced collateral values, and (ii) a dataset that covers all incorporated firms in Sweden over the period 2000-2006. We find that the loss in collateral value reduces both the amount and the maturity of firm debt and leads firms to contract investment, employment, and assets. The legal reform may distort investment and asset allocation decisions, as firmsdoi:10.2139/ssrn.2694575 fatcat:sqh6w6eogrhl5czil2ttvf7z2q