Domestic Creditor Rights and External Private Debt

Dados Bibliográficos

ID9718043
AutoresHaichao Fan (0000-0002-3051-2774, Fudan University), Xiang Gao (0000-0001-6812-8156, Shanghai University of Finance and Economics)
Ano2017
Volume127
Fascículo606
Páginas2410-2440
Data de publicação2017-11-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12380
OpenAlexW3121972360
IdiomaEN
Citações recebidas1
Referências citadas48

This article unbundles institutions protecting domestic and foreign creditors’ rights. We estimate a negative relation between the degree of domestic rights protection and the external stock of private non‐guaranteed debt in 85 developing countries. A supply‐side explanation is that strong domestic protection supports reliable outside financing options for potential external debt defaulters; foreign investors anticipating this would tighten credit constraints ex ante. Then we formalise the argument in a private borrowing and default model, and show that centralisation is no longer necessarily welfare superior

Argument (complex analysis · Business · Creditor · Debt · Economics · Ex-ante · External debt · Financial system · Internal debt · Macroeconomics · Market economy · Monetary economics · Welfare · Banking stability, regulation, efficiency · Finance · Global Financial Crisis and Policies · Islamic Finance and Banking Studies