Default resolution and access to fresh credit in an emerging market
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We examine loan defaults by firms and identify the factors that influence both the default resolution process and firms' access to fresh credit after firms exit default. Using a dataset of all commercial loans made in Pakistan from 2006 to 2013, we find an important role for collateral. Collateral expedites both the default resolution process and access to fresh credit after exiting default. Higher interest rates increase the default duration. Relationships with multiple lenders as well as those with multiple branches of one lender are associated with obtaining fresh credit at the post default stage.
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Hussain, Inayat (2017)This thesis examines default resolution, fresh credit and lending relationships. The results suggest that collateral expedites both default resolution and access to fresh credit while higher interest rates increase duration ...
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Greene, William (2008)© Cambridge University Press 2008.Acknowledgements: I am grateful to Terry Seaks for valuable comments on an earlier draft of this paper and to Jingbin Cao for his able research assistance. The provider of the data and ...