2007年-世界发展银行全球_Credit_Information_Quality_and_Corporate_Debt_Maturity___Theory_and_Evidence_43页_648kb

Credit Information Quality and Corporate Debt Maturity: Theory and Evidence Summary

Core Content

This paper explores the relationship between credit information quality and corporate debt maturity structure, focusing on the role of short-term lending in credit markets with imperfect information. It investigates how the availability and accuracy of credit information influence the optimal debt maturity choice from the lender's perspective, particularly in developing countries where firms face credit constraints.

Main Views

• Short-term lending as a hedge against uncertainty: In a two-period model, short-term lending allows banks to exit investments early if a firm defaults, thereby limiting losses. This is especially valuable in environments with high uncertainty.

• Short-term lending as a screening device: Under asymmetric information, where firms have private default risk information, short-term lending can serve as a screening mechanism. Banks use short-term contracts to identify high-risk firms, which are more impatient and less willing to wait for future returns.

• Role of information asymmetry: The paper argues that higher levels of information asymmetry lead to a preference for short-term lending. This is because the uncertainty in borrower credit quality makes it difficult for lenders to commit to long-term contracts, and short-term contracts allow them to adjust based on new information.

• Impact of institutions on debt maturity: The study highlights the importance of institutions that improve credit information quality, such as public and private credit bureaus and better accounting standards, in influencing the structure of corporate debt. These institutions reduce information asymmetry, leading to a higher proportion of long-term debt.

Key Findings

• Theoretical insights:

  • In environments with high uncertainty, short-term lending becomes the equilibrium choice for banks, even though it may not be socially optimal.
  • The model shows that short-term contracts are more effective in screening high-risk borrowers, especially when they are more impatient and prefer immediate returns.

• Empirical results:

  • Better credit information (as measured by the presence of credit registries and improved accounting standards) is associated with a higher share of long-term debt in both developed and developing countries.
  • Countries with more uncertain legal frameworks have a higher share of short-term debt.
  • Lower dispersion in firms' default probabilities is linked to higher short-term debt ratios, suggesting that short-term lending is used more effectively as a screening tool in opaque credit markets.

Methodology and Data

• The paper develops a theoretical model of short-term and long-term lending under asymmetric and symmetric information.
• It introduces a novel cross-country database to test the model's predictions.
• The empirical analysis controls for legal institutions, financial development, and other macro and micro factors to isolate the impact of credit information quality on debt maturity structure.

Policy Implications

• Improving credit information quality is crucial for increasing access to long-term finance for firms.
• Policies that promote the development of credit registries and enhance accounting standards can lead to more efficient debt maturity structures.
• In developing countries, where information asymmetry is more pronounced, improving credit information systems is a key priority for financial reform.

Structure of the Paper

1. Introduction: Sets the context and outlines the research question.
2. Literature Review: Reviews existing theories on debt maturity choices, focusing on the role of information asymmetry.
3. Short-term lending as a hedge against uncertainty: Presents a two-period model to analyze the impact of uncertainty on debt maturity.
4. Short-term lending as a screening device: Extends the model to a multi-period setting with asymmetric information and identifies the conditions under which short-term lending is preferred.
5. Empirical Analysis: Uses cross-country data to test the theoretical predictions.
6. Conclusion: Summarizes findings and discusses policy implications.