How Do Private Firms Use Credit Lines?

9 Pages Posted: 24 May 2011

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC)

John C. Driscoll

Board of Governors of the Federal Reserve System

Date Written: May 23, 2011

Abstract

The authors find that firms that face higher upfront commitment fees, risk premium spreads, or usage fees have smaller credit lines, while those with higher overdraft fees have larger ones. Firms with greater profit growth in the past have larger credit lines, while those with more internal funds or higher volatility in profit growth have smaller credit lines. The results for line utilization are quite similar.

Keywords: bank loan commitment, credit lines, private firms, financial economics

JEL Classification: E440, G210

Suggested Citation

Agarwal, Sumit and Chomsisengphet, Souphala and Driscoll, John C., How Do Private Firms Use Credit Lines? (May 23, 2011). Economic Perspectives, Vol. 35, No. 2, p. 71, 2011, Available at SSRN: https://ssrn.com/abstract=1850708

Sumit Agarwal (Contact Author)

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Souphala Chomsisengphet

Office of the Comptroller of the Currency (OCC) ( email )

400 7th Street, SW
Washington, DC 20219
United States
202-649-5533 (Phone)

John C. Driscoll

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://www.federalreserve.gov/econresdata/john-c-driscoll.htm

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