What happens after corporate default? Stylized facts on access to credit

Diana Bonfim*, Daniel A. Dias, Christine Richmond

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

12 Citações (Scopus)

Resumo

In this paper, we investigate what happens to firms after they default on their bank loans. We approach this question by establishing a set of stylized facts concerning the evolution of corporate default and its resolution, focusing on access to credit after default. Using a unique dataset from Portugal, we observe that half of the corporate default episodes last 5 quarters. Most firms continue to have access to credit immediately after resolving default, though only a minority has access to new loans. Firms have more difficulties in regaining access to credit if they are small, if their default was long and severe, if they borrow from only one bank or if they default with their main lender. Further, half of the defaulting firms record another default in the future. We observe that firms with repeated defaults are, on average, smaller and experience longer and more severe defaults.
Idioma originalEnglish
Páginas (de-até)2007-2025
Número de páginas19
RevistaJournal of Banking and Finance
Volume36
Número de emissão7
DOIs
Estado da publicaçãoPublicado - 1 jul. 2012
Publicado externamenteSim

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