Scipediacontent: Scipediacontent moved page Draft Content 714248041 to Bergman Benmelech 2008a

2021-01-25T15:29:11Z

Scipediacontent moved page Draft Content 714248041 to Bergman Benmelech 2008a

Scipediacontent: Created page with " == Abstract == How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidatio..."

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Created page with " == Abstract == How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidatio..."

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== Abstract ==

How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidation values determine the allocation of bargaining power between creditors and debtors, there is little empirical evidence on financial contract renegotiations and the role asset values play in such bargaining. This paper attempts to fill this gap. We develop an incomplete-contracting model of financial contract renegotiation and estimate it using data on the airline industry in the United States. We find that airlines successfully renegotiate their lease obligations downwards when their financial position is sufficiently poor and when the liquidation value of their fleet is low. Our results show that strategic renegotiation is common in the airline industry. Moreover, the results emphasize the importance of the incomplete contracting perspective to real world financial contract renegotiation.

== Original document ==

The different versions of the original document can be found in:

* [http://dx.doi.org/10.2139/ssrn.969404 http://dx.doi.org/10.2139/ssrn.969404]

* [http://dx.doi.org/10.3386/w14059 http://dx.doi.org/10.3386/w14059]

* [http://www.nber.org/papers/w14059.pdf http://www.nber.org/papers/w14059.pdf]

* [https://doi.org/10.3386/w14059 https://doi.org/10.3386/w14059]

* [http://academic.oup.com/qje/article-abstract/123/4/1635/1933211 http://academic.oup.com/qje/article-abstract/123/4/1635/1933211],
: [https://academic.oup.com/qje/article-abstract/123/4/1635/1933211 https://academic.oup.com/qje/article-abstract/123/4/1635/1933211],
: [https://www.nber.org/papers/w14059 https://www.nber.org/papers/w14059],
: [https://www.nber.org/papers/w14059.pdf https://www.nber.org/papers/w14059.pdf],
: [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=969404 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=969404],
: [https://www.jstor.org/stable/40506219 https://www.jstor.org/stable/40506219],
: [https://ideas.repec.org/a/oup/qjecon/v123y2008i4p1635-1677..html https://ideas.repec.org/a/oup/qjecon/v123y2008i4p1635-1677..html],
: [https://www.scholars.northwestern.edu/en/publications/liquidation-values-and-the-credibility-of-financial-contract-rene https://www.scholars.northwestern.edu/en/publications/liquidation-values-and-the-credibility-of-financial-contract-rene],
: [https://econpapers.repec.org/RePEc:oup:qjecon:v:123:y:2008:i:4:p:1635-1677. https://econpapers.repec.org/RePEc:oup:qjecon:v:123:y:2008:i:4:p:1635-1677.],
: [https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1136169_code93842.pdf?abstractid=969404&mirid=1 https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1136169_code93842.pdf?abstractid=969404&mirid=1],
: [https://academic.oup.com/qje/article-pdf/123/4/1635/5446925/123-4-1635.pdf https://academic.oup.com/qje/article-pdf/123/4/1635/5446925/123-4-1635.pdf],
: [http://portal.idc.ac.il/en/main/research/caesareacenter/annualsummit/documents/bergman.pdf http://portal.idc.ac.il/en/main/research/caesareacenter/annualsummit/documents/bergman.pdf],
: [http://www.law.virginia.edu/pdf/olin/conf07/benmelech.pdf http://www.law.virginia.edu/pdf/olin/conf07/benmelech.pdf],
: [https://www.ssrn.com/abstract=969404 https://www.ssrn.com/abstract=969404],
: [https://www.gsb.stanford.edu/sites/default/files/documents/fin_04_08-benmelech.pdf https://www.gsb.stanford.edu/sites/default/files/documents/fin_04_08-benmelech.pdf],
: [https://www.cabdirect.org/cabdirect/abstract/20093261163 https://www.cabdirect.org/cabdirect/abstract/20093261163],
: [http://nbergman.scripts.mit.edu/docs/AirlineRenegotiation.pdf http://nbergman.scripts.mit.edu/docs/AirlineRenegotiation.pdf],
: [https://academic.microsoft.com/#/detail/2154889822 https://academic.microsoft.com/#/detail/2154889822]

* [http://academic.oup.com/qje/article-pdf/123/4/1635/5446925/123-4-1635.pdf http://academic.oup.com/qje/article-pdf/123/4/1635/5446925/123-4-1635.pdf],
: [http://dx.doi.org/10.1162/qjec.2008.123.4.1635 http://dx.doi.org/10.1162/qjec.2008.123.4.1635]

DOIS: 10.1162/qjec.2008.123.4.1635 10.3386/w14059 10.2139/ssrn.969404

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Bergman Benmelech 2008a - Revision history

Scipediacontent: Scipediacontent moved page Draft Content 714248041 to Bergman Benmelech 2008a

Scipediacontent: Created page with " == Abstract == How do liquidation values affect financial contract renegotiation? While the 'incomplete contracting' theory of financial contracting predicts that liquidatio..."