【主讲】Qi Sun (University of Southern California)
【主题】Why does cash coexist with unused lines of credit?
【时间】2013年7月8日 (周一) 15：30-17：00
【地点】上海财经大学经济学院楼701室
【语言】英文
【摘要】This paper estimates a structural model of long-term debt in which firms use both cash and lines of credit for liquidity management. Lines of credit provide the option to draw funds without paying interest until the funds are actually used. However, the access to lines of credit is contingent on the bank's ability or willingness to supply funds. Thus, relying exclusively on lines of credit for future liquidity needs is risky. This motivates the firm to issue long-term debt now the funds from long-term borrowing are secured until the maturity date. The estimated and hold the funds in cash because model shows that the optimal choice between cash and unused lines of credit depends primarily on the maturity of debt, the price of cash, and future financing Consistent with the data, the model predicts that the firm's cash accumulation is positively correlated with debt issuance, and the correlation is increasing in the maturity of debt.
