Does credit reporting lead to a decline in relationship lending? Evidence from information sharing technology
By Andrew Sutherland. Journal of Accounting & Economics, 2018
139 citations recorded by the source corpus.
I examine how credit reporting affects where firms access credit and how lenders contract with them. I use within firm-time and lender-time tests that exploit lenders joining a credit bureau and sharing information in a staggered pattern. I find information sharing reduces relationship-switching costs, particularly for firms that are young, small, or have had no defaults. After sharing, lenders transition away from relationship contracting, in two ways: contract maturities in new relationships are shorter, and lenders are less willing to provide financing to their delinquent borrowers. My results highlight the mixed effects of transparency-improving financial technologies on credit availability.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/2ff002f98ba23c431bdfe8130b6cf3629880c3bf
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Citations in the corpus
- The innovation consequences of mandatory patent disclosures (2020, background): “Moreover, similar in spirit to Bird and Karolyi (2016) and Abramova, Core, and Sutherland (2018), we investigate whether firms strategically change the number of figures that they include in their patents after the AIPA.”