Publication:
Credit Stimulus, Executive Ownership, and Firm Leverage

Thumbnail Image
Files
Credit Stimulus, Executive Ownership, and Firm Leverage.pdf (442.58 KB)
Date
2021-12-14
Authors
Chakraborti, Rajdeep
Dahiya, Sandeep
Ge, Lei
Advisor
Court
Journal Title
Journal ISSN
Volume Title
Publisher
INFORMS
Defense Date
Metrics
Citation
Research Projects
Organizational Units
Journal Issue
URI
https://hdl.handle.net/20.500.14417/3299
DOI
https://doi.org/10.1287/mnsc.2021.4188
Abstract
We show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in firms’ borrowing. We provide extensive robustness tests to validate our results.
Unesco subjects
License
Attribution 4.0 International
School
IE Business School
Center
Keywords
Citation
Rajdeep Chakraborti, Sandeep Dahiya, Lei Ge, Pedro Gete (2021) Credit Stimulus, Executive Ownership, and Firm Leverage. Management Science 68(10):7682-7700. https://doi.org/10.1287/mnsc.2021.4188
Collections
Research Articles