Guriev, Sergei and Makarov, Igor (2002) Debt overhang and barter in Russia. Journal of Comparative Economics, 30 (4). pp. 635-656. ISSN 0147-5967
Abstract
This paper develops a model in which costly barter is used by firms to protect working capital against outside creditors. Although creditors could agree to postpone debt payments and to avoid destroying the firm's working capital, if the firm cannot commit not to divert cash ex post, the outcome of renegotiation still provides ex ante incentives to use barter. We show that the greater is the debt overhang, the more likely is the use of barter, with and without the possibility of debt restructuring. Empirical evidence from Russian firm-level data is shown to be consistent with the model's predictions.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.sciencedirect.com/science/journal/01475... |
| Additional Information: | © 2002 Association for Comparative Economic Studies |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
| Journal of Economic Literature Classification System: | E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P31 - Socialist Enterprises and Their Transitions |
| Sets: | Departments > Finance Collections > Economists Online |
| Date Deposited: | 19 Aug 2013 07:41 |
| URL: | http://eprints.lse.ac.uk/51754/ |
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