Bargaining power and renegotiation of small private debt contracts
Autor(a) principal: | |
---|---|
Data de Publicação: | 2022 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10316/102231 https://doi.org/10.1007/s10436-022-00413-y |
Resumo: | The present study is focused on the renegotiation of small debt contracts for small and medium-sized enterprises (SMEs). We use a proprietary database from a Brazilian bank and find that, when compared to large loans, the probability of renegotiation of small loans is much lower. We argue that this is due to the lack of ex-ante contingencies in this kind of loan, which reduces the transfer of control to the lender in situations in which the borrower is not in financial distress, and to the lower bargaining power of SMEs when compared to large public companies. We find that borrower delinquency events and borrower bargaining power proxies are positively related to the probability of small loan renegotiation. We also find that delinquency events reduce the probability of borrower-friendly outcomes as well as the number of key contractual terms renegotiated favorably to the borrower. Further, we find that the borrower’s bargaining power increases the likelihood that the borrower will obtain a favorable outcome and a greater number of favorable key contractual terms in the outcome of the renegotiation. |
id |
RCAP_c59f6bcf00777e1aa7c23b84e918e3d6 |
---|---|
oai_identifier_str |
oai:estudogeral.uc.pt:10316/102231 |
network_acronym_str |
RCAP |
network_name_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository_id_str |
7160 |
spelling |
Bargaining power and renegotiation of small private debt contractsLoan renegotiation; control rights; bargaining power; small debt contracts.The present study is focused on the renegotiation of small debt contracts for small and medium-sized enterprises (SMEs). We use a proprietary database from a Brazilian bank and find that, when compared to large loans, the probability of renegotiation of small loans is much lower. We argue that this is due to the lack of ex-ante contingencies in this kind of loan, which reduces the transfer of control to the lender in situations in which the borrower is not in financial distress, and to the lower bargaining power of SMEs when compared to large public companies. We find that borrower delinquency events and borrower bargaining power proxies are positively related to the probability of small loan renegotiation. We also find that delinquency events reduce the probability of borrower-friendly outcomes as well as the number of key contractual terms renegotiated favorably to the borrower. Further, we find that the borrower’s bargaining power increases the likelihood that the borrower will obtain a favorable outcome and a greater number of favorable key contractual terms in the outcome of the renegotiation.Annals of Finance/ springer2022-09-142023-09-14T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlehttp://hdl.handle.net/10316/102231http://hdl.handle.net/10316/102231https://doi.org/10.1007/s10436-022-00413-yeng1614-24461614-2454https://link.springer.com/article/10.1007/s10436-022-00413-y#citeasValente, JoséAugusto, Mário António GomesMurteira, José Maria Ruasinfo:eu-repo/semantics/embargoedAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-10-27T11:08:39Zoai:estudogeral.uc.pt:10316/102231Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T21:19:16.342283Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Bargaining power and renegotiation of small private debt contracts |
title |
Bargaining power and renegotiation of small private debt contracts |
spellingShingle |
Bargaining power and renegotiation of small private debt contracts Valente, José Loan renegotiation; control rights; bargaining power; small debt contracts. |
title_short |
Bargaining power and renegotiation of small private debt contracts |
title_full |
Bargaining power and renegotiation of small private debt contracts |
title_fullStr |
Bargaining power and renegotiation of small private debt contracts |
title_full_unstemmed |
Bargaining power and renegotiation of small private debt contracts |
title_sort |
Bargaining power and renegotiation of small private debt contracts |
author |
Valente, José |
author_facet |
Valente, José Augusto, Mário António Gomes Murteira, José Maria Ruas |
author_role |
author |
author2 |
Augusto, Mário António Gomes Murteira, José Maria Ruas |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Valente, José Augusto, Mário António Gomes Murteira, José Maria Ruas |
dc.subject.por.fl_str_mv |
Loan renegotiation; control rights; bargaining power; small debt contracts. |
topic |
Loan renegotiation; control rights; bargaining power; small debt contracts. |
description |
The present study is focused on the renegotiation of small debt contracts for small and medium-sized enterprises (SMEs). We use a proprietary database from a Brazilian bank and find that, when compared to large loans, the probability of renegotiation of small loans is much lower. We argue that this is due to the lack of ex-ante contingencies in this kind of loan, which reduces the transfer of control to the lender in situations in which the borrower is not in financial distress, and to the lower bargaining power of SMEs when compared to large public companies. We find that borrower delinquency events and borrower bargaining power proxies are positively related to the probability of small loan renegotiation. We also find that delinquency events reduce the probability of borrower-friendly outcomes as well as the number of key contractual terms renegotiated favorably to the borrower. Further, we find that the borrower’s bargaining power increases the likelihood that the borrower will obtain a favorable outcome and a greater number of favorable key contractual terms in the outcome of the renegotiation. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-09-14 2023-09-14T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10316/102231 http://hdl.handle.net/10316/102231 https://doi.org/10.1007/s10436-022-00413-y |
url |
http://hdl.handle.net/10316/102231 https://doi.org/10.1007/s10436-022-00413-y |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
1614-2446 1614-2454 https://link.springer.com/article/10.1007/s10436-022-00413-y#citeas |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/embargoedAccess |
eu_rights_str_mv |
embargoedAccess |
dc.publisher.none.fl_str_mv |
Annals of Finance/ springer |
publisher.none.fl_str_mv |
Annals of Finance/ springer |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
|
_version_ |
1799134087061962752 |