Natural disasters and firm leasing: A collateral channel

This paper studies the role of lease financing in disaster-affected firms under collateral constraints. Disaster-affected firms demand funds for post-disaster reconstruction. However, the destruction of natural disasters leads to collateral constraints, which create external financing frictions. I f...

Full description

Saved in:
Bibliographic Details
Published inJournal of corporate finance (Amsterdam, Netherlands) Vol. 82; p. 102428
Main Author Wang, Jiawei (Brooke)
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.10.2023
Subjects
Collateral constraints
Financing frictions
Leasing
Natural disasters
Leasing
G0
Financing frictions
Natural disasters
Collateral constraints
G32
Online AccessGet full text

Cover

More Information
Summary:This paper studies the role of lease financing in disaster-affected firms under collateral constraints. Disaster-affected firms demand funds for post-disaster reconstruction. However, the destruction of natural disasters leads to collateral constraints, which create external financing frictions. I find that affected firms obtain financing through operating leases after natural disasters. The significance of the findings highlights the importance of operating leases for collateral-constrained firms.
ISSN:0929-1199
1872-6313
DOI:10.1016/j.jcorpfin.2023.102428