Biblioteca PGR


PP958
Analítico de Periódico



MUKHERJEE, Saptarshi, e outros
Borrowers' distress and debt relief : evidence from a natural experiment / Saptarshi Mukherjee, Krishnamurthy Subramanian, Prasanna Tantri
The Journal of Law & Economics, Chicago, v.61 n.4 (November 2018), p.607-635


DIREITO FINANCEIRO / Índia, FINANCIAMENTO / Índia, EMPRÉSTIMO / Índia, PERDÃO / Índia, DÍVIDA / Índia, SISTEMA BANCÁRIO / Índia, DESENVOLVIMENTO ECONÓMICO / Índia

Using unique borrower-level data, we study the causal effect of debt relief on the loan performance of distressed and nondistressed borrowers. We employ a regression discontinuity design that exploits exogenous cutoff dates underlying the 2008 Indian debt waiver program to separate defaulters on loans into beneficiaries and nonbeneficiaries of waivers. By identifying distress before the waiver program using exogenous borrower-level shocks, we examine performance on loans originated after the waiver program. Loan performance of nondistressed beneficiaries worsens, while that of distressed borrowers improves. While existing studies aggregate the effects of debt relief across distressed and nondistressed borrowers, we highlight crucial differences between them.