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Cited by 257

The DOI matches its Crossref record; 75 of the 75 references it cites were found in a registry or an index.

Do Creditor Rights Increase Employment Risk? Evidence from Loan Covenants

FALATO, ANTONIO, LIANG, NELLIE·2016·The Journal of Finance
DOI 10.1111/jofi.12435
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Abstract

Using a regression discontinuity design, we provide evidence that there are sharp and substantial employment cuts following loan covenant violations, when creditors gain rights to accelerate, restructure, or terminate a loan. The cuts are larger at firms with higher financing frictions and with weaker employee bargaining power, and during industry and macroeconomic downturns, when employees have fewer job opportunities. Union elections that create new labor bargaining units lead to higher loan spreads, consistent with creditors requiring compensation when employees gain bargaining power. Overall, binding financial contracts have a large impact on employees and are an amplification mechanism of economic downturns.

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Crossref · 10.1111/jofi.12435

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Metadata

Authors
FALATO, A., & LIANG, N.
Venue
The Journal of Finance
Publisher
Wiley
Published
2016-11-10
Volume
71
Issue
6
Pages
2545-2590
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/jofi.12435
OpenAlex
W1540878127
Cited by
257
References
75
FWCI
75.60
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Do Creditor Rights Increase Employment Risk? Evidence from Loan Covenants. https://app.cochat.ai/papers/10.1111/jofi.12435
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FALATO, A., & LIANG, N. (2016). Do Creditor Rights Increase Employment Risk? Evidence from Loan Covenants. The Journal of Finance. https://doi.org/10.1111/jofi.12435

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.