Collateral Value and Financing Constraint: Analysis using Corporate Data after the Great Tohoku Earthquake

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Other Title
  • 担保価値と資金制約 : 東日本大震災後の企業データを用いた分析
  • タンポ カチ ト シキン セイヤク : ヒガシニホン ダイシンサイ ゴ ノ キギョウ データ オ モチイタ ブンセキ

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The aim of this paper is to study the collateral channel which predicts that the reduction in the value of firms' physical assets leads to their smaller debt capacity, hence to borrowing constraints. As a unique feature of our approach, we employ a quasi-natural experiment approach and focus on a purely exogenous shock on firms' collateral values stemming from the damages associated with the Great Tohoku Earthquake, which enables us to identify the collateral channel in a much cleaner manner than conventional approaches. Our estimates show that firms that suffered from damages on their tangible fixed assets were more likely to face difficulty in borrowing from financial institutions. This finding supports the existence of the collateral channel.

Journal

  • 経済研究

    経済研究 66 (3), 224-241, 2015-07-24

    岩波書店

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