Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244686 
Authors: 
Year of Publication: 
2020
Series/Report no.: 
LawFin Working Paper No. 6
Publisher: 
Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin), Frankfurt a. M.
Abstract: 
This paper documents that resource reallocation across firms is an important mechanism through which creditor rights affect real outcomes. I exploit the staggered adoption of an international convention that provides globally consistent strong creditor protection for aircraft finance. After this reform, country-level productivity in the aviation sector increases by 12%, driven mostly by across-firm reallocation. Productive airlines borrow more, expand, and adopt new technology at the expense of unproductive ones. Such reallocation is facilitated by (i) easier and quicker asset redeployment; and (ii) the influx of foreign financiers offering innovative financial products to improve credit allocative efficiency. I further document an increase in competition and an improvement in the breadth and the quality of products available to consumers.
Subjects: 
Creditor Rights
Allocative Effciency
Reallocation
Productivity and Growth
Law and Finance
JEL: 
D22
D24
G32
G33
K12
K33
L11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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