Vintage capital and creditor protection

Efraim Benmelech, Nittai K. Bergman

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

We provide novel evidence linking the level of creditor protection provided by law to the degree of usage of technologically older, vintage capital in the airline industry. Using a panel of aircraft-level data around the world, we find that better creditor rights are associated with both aircraft of a younger vintage and newer technology, as well as firms with larger aircraft fleets. We propose that by mitigating financial shortfalls, enhanced legal protection of creditors facilitates the ability of firms to make large capital investments, adapt advanced technologies, and foster productivity.

Original languageEnglish (US)
Pages (from-to)308-332
Number of pages25
JournalJournal of Financial Economics
Volume99
Issue number2
DOIs
StatePublished - Feb 1 2011

Fingerprint

Vintage capital
Aircraft
Airline industry
Productivity
Legal protection
Capital investment
Creditor rights

Keywords

  • Asset-backed securities
  • Bankruptcy
  • Collateral
  • Contagion

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management

Cite this

Benmelech, Efraim ; Bergman, Nittai K. / Vintage capital and creditor protection. In: Journal of Financial Economics. 2011 ; Vol. 99, No. 2. pp. 308-332.
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Vintage capital and creditor protection. / Benmelech, Efraim; Bergman, Nittai K.

In: Journal of Financial Economics, Vol. 99, No. 2, 01.02.2011, p. 308-332.

Research output: Contribution to journalArticle

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