Debt Rollover and Structural Deleverage
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| Title | Debt Rollover and Structural Deleverage
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| Author | Zhang Yilin and Pu Ming |
| Organization | Southwestern University Of Finance And Economics |
| Email | ylzhang@swufe.edu.cn；puming@swufe.edu.cn |
| Key Words | Deleverage; Debt Rollover; Zombie Firms; Economic Uncertainty |
| Abstract | This paper investigates the impact of economic uncertainty on bank’s debt rollover. We find that economic uncertainty distorts bank’s rollover decision in the way that the bank may rollover zombie firms’ debt while deleveraging normal firms’ debt, even in absence of government intervention (subsidies to state-owned enterprises, for example). This implies that in the recent structural deleverage in China, the phenomenon of keeping “bad” leverage while reducing “good” leverage might indicate market failure. |
| Serial Number | WP1332 |
| Time | 2019-02-12 |
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