Bellon, Aymeric and Harpedanne de Belleville, Louis-Marie and Pinardon-Touati, Noémie (2021): Mediating Financial Intermediation.
Preview |
PDF
MPRA_paper_108339.pdf Download (939kB) | Preview |
Abstract
This paper studies the resolution of disputes between firms and their lenders through external mediators, who suggest a non-legally binding solution to resolve a disagreement after communicating with all parties. We exploit an administrative database on firms’ outcomes matched to the French credit registry and plausible exogenous variation in eligibility to public mediators across counties for identification. Credit, employment and investment increase following the mediation, causing an overall reduction in firms’ liquidation of 34.6 percentage points. All the effects are driven by firms that borrow from more than one financial institution, supporting the view that mediators solve coordination problems between lenders.
Item Type: | MPRA Paper |
---|---|
Original Title: | Mediating Financial Intermediation |
Language: | English |
Keywords: | Mediation, credit, asymmetric information, coordination of creditors, informal restructuring, financial constraints, debt overhang, bankruptcy, employment, investment, judge instrument, borders |
Subjects: | D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation H - Public Economics > H8 - Miscellaneous Issues > H81 - Governmental Loans ; Loan Guarantees ; Credits ; Grants ; Bailouts H - Public Economics > H8 - Miscellaneous Issues > H89 - Other |
Item ID: | 108339 |
Depositing User: | M. Louis-Marie Harpedanne de Belleville |
Date Deposited: | 18 Jun 2021 07:48 |
Last Modified: | 18 Jun 2021 07:48 |
References: | Agarwal, S., G. Amromin, I. Ben-David, S. Chomsisengphet, T. Piskorski, and A. Seru. 2017. Policy intervention in debt renegotiation: Evidence from the home affordable modification program. Journal of Political Economy 125:654–712. Angrist, J. D., and J.-S. Pischke. 2008. Mostly harmless econometrics: An empiricist’s companion. Princeton university press. Arnold, D., W. Dobbie, and C. S. Yang. 2018. Racial bias in bail decisions. The Quarterly Journal of Economics 133:1885–932. Bach, L. 2014. Are small businesses worthy of financial aid? evidence from a french targeted credit program. Review of Finance 18:877–919. Bachas, N., O. Kim, and C. Yannelis. 2019. Loan guarantees and credit supply. Available at SSRN 3367958. Barrot, J.-N., T. Martin, J. Sauvagnat, and B. Vallee. 2019. Employment effects of alleviating financing frictions: Worker-level evidence from a loan guarantee program. Available at SSRN 3409349. Barrot, J.-N., and J. Sauvagnat. 2016. Input specificity and the propagation of idiosyncratic shocks in production networks. The Quarterly Journal of Economics 131:1543–92. Berger, D., N. Turner, and E. Zwick. 2016. Stimulating housing markets. The Journal of Finance. Bernstein, S., E. Colonnelli, X. Giroud, and B. Iverson. 2019. Bankruptcy spillovers. Journal of Financial Economics 133:608–33. Bertrand, M., A. Schoar, and D. Thesmar. 2007. Banking deregulation and industry structure: Evidence from the french banking reforms of 1985. The Journal of Finance 62:597–628. Brown, J. D., and J. S. Earle. 2017. Finance and growth at the firm level: Evidence from sba loans. The Journal of Finance 72:1039–80. Cahuc, P., S. Carcillo, and T. Le Barbanchon. 2019. The effectiveness of hiring credits. The Review of Economic Studies 86:593–626. Carvalho, V. M., M. Nirei, Y. U. Saito, and A. Tahbaz-Salehi. 2021. Supply chain disruptions: Evidence from the great east japan earthquake. The Quarterly Journal of Economics 136:1255–321. Cheng, I.-H., F. Severino, and R. Townsend. 2019. How do consumers fare when dealing with debt collectors? evidence from out-of-court settlements. Evidence from Out-of-Court Settlements (May 28, 2019). Tuck School of Business Working Paper. Chodorow-Reich, G., L. Feiveson, Z. Liscow, and W. G. Woolston. 2012. Does state fiscal relief during recessions increase employment? evidence from the american recovery and reinvestment act. American Economic Journal: Economic Policy 4:118–45. Chodorow-Reich, G., and L. Karabarbounis. 2016. The limited macroeconomic effects of unemployment benefit extensions. Working Paper, National Bureau of Economic Research. Davis, S. J., and J. Haltiwanger. 1992. Gross job creation, gross job destruction, and employment reallocation. The Quarterly Journal of Economics 107:819–63. Davis, S. J., J. C. Haltiwanger, S. Schuh, et al. 1998. Job creation and destruction. MIT Press Books. Eberly, J., and A. Krishnamurthy. 2014. Efficient credit policies in a housing debt crisis. Brookings Papers on Economic Activity 2014:73–136. Egan, M. L., G. Matvos, and A. Seru. 2018. Arbitration with uninformed consumers. Working Paper, National Bureau of Economic Research. Foster, L., J. Haltiwanger, and C. Syverson. 2008. Reallocation, firm turnover, and efficiency: Selection on productivity or profitability? American Economic Review 98:394–425. Gale, W. G. 1990. Federal lending and the market for credit. Journal of Public Economics 42:177–93. Gale, W. G. 1991. Economic effects of federal credit programs. The American Economic Review 133–52. Hagedorn, M., F. Karahan, I. Manovskii, and K. Mitman. 2013. Unemployment benefits and unemployment in the great recession: the role of macro effects. Working Paper, National Bureau of Economic Research. Hauswald, R., and R. Marquez. 2006. Competition and strategic information acquisition in credit markets. The Review of Financial Studies 19:967–1000. He, Z., and W. Xiong. 2012. Dynamic debt runs. The Review of Financial Studies 25:1799–843. Iverson, B. 2018. Get in line: Chapter 11 restructuring in crowded bankruptcy courts. Management Science 64:5370–94. Khalil, F., D. Martimort, and B. Parigi. 2007. Monitoring a common agent: Implications for financial contracting. Journal of Economic Theory 135:35–67. Krishnamurthy, A., and A. Vissing-Jorgensen. 2011. The effects of quantitative easing on interest rates: channels and implications for policy. Working Paper, National Bureau of Economic Research. La Porta, R., F. Lopez-de Silanes, and A. Shleifer. 2002. Government ownership of banks. The Journal of Finance 57:265–301. Mayer, C., E. Morrison, T. Piskorski, and A. Gupta. 2014. Mortgage modification and strategic behavior: evidence from a legal settlement with countrywide. American Economic Review 104:2830–57. Mian, A., and A. Sufi. 2009. The consequences of mortgage credit expansion: Evidence from the us mortgage default crisis. The Quarterly Journal of Economics 124:1449–96. Müller, K. 2019. Busy bankruptcy courts and the cost of credit. Available at SSRN 3088676. Myers, S. C. 1977. Determinants of corporate borrowing. Journal of financial economics 5:147–75. Rothstein, J. 2011. Unemployment insurance and job search in the great recession. Working Paper, National Bureau of Economic Research. Slaikeu, K. A. 1996. When push comes to shove: A practical guide to mediating disputes. Jossey-Bass. Smith, B. 1983. Limited information, credit rationing, and optimal government lending policy. The American Economic Review 73:305–18. Stock, J., and M. Yogo. 2005. Asymptotic distributions of instrumental variables statistics with many instruments, vol. 6. Chapter. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/108339 |