Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128500
Authors: 
He, Qing
Lu, Liping
Ongena, Steven
Year of Publication: 
2016
Series/Report no.: 
CFS Working Paper Series 529
Abstract: 
Who gains from inter-corporate credit? To answer this question we measure the impact of the announcements of inter-corporate loans in China on the stock prices of the firms involved. We find that the average abnormal return for the issuers of inter-corporate loans is significantly negative, whereas it is positive for the receivers. Issuing firms may be perceived by investors to have run out of worthwhile projects to finance, while receiving firms are being certified as creditworthy. Subsequent firm performance and investment confirms these valuations as overall accurate.
Subjects: 
entrusted loan
inter-corporate loan
credit misallocation
certification
JEL: 
G30
G14
G21
Document Type: 
Working Paper

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