Online Reputation and Debt Capacity

66 Pages Posted: 9 Mar 2020 Last revised: 31 Jul 2020

See all articles by François Derrien

François Derrien

HEC Paris - Finance Department

Alexandre Garel

Audencia Business School; Labex ReFi

Arthur Petit-Romec

SKEMA Business School; Université Côte d'Azur

Jean-Philippe Weisskopf

Ecole hôtelière de Lausanne

Date Written: February 14, 2020


This paper explores the effects of online customer ratings on debt capacity. Using a large sample of Parisian restaurants, we find a positive and economically significant relation between customer ratings and bank debt. We use the locally exogenous variation in customer ratings resulting from the rounding of scores in regression discontinuity tests to establish causality. Customer ratings have more impact on debt capacity when information asymmetry is higher. They affect financial policy through a reduction in cash flow risk and greater resilience to demand shocks. Restaurants with good ratings use their extra debt capacity to invest in tangible assets.

Keywords: online reputation, customer ratings, corporate debt, corporate investment

JEL Classification: G14, G32, L15, L83

Suggested Citation

Derrien, François and Garel, Alexandre and Petit-Romec, Arthur and Weisskopf, Jean-Philippe, Online Reputation and Debt Capacity (February 14, 2020). HEC Paris Research Paper No. FIN-2020-1367, Available at SSRN: or

François Derrien (Contact Author)

HEC Paris - Finance Department ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
33 1 39 67 72 98 (Phone)


Alexandre Garel

Audencia Business School ( email )

8 Road Joneliere
BP 31222
Nantes Cedex 3, 44312

Labex ReFi ( email )

79 avenue de la République
Paris, 75011

Arthur Petit-Romec

SKEMA Business School ( email )

Sophia Antipolis

Université Côte d'Azur ( email )


Jean-Philippe Weisskopf

Ecole hôtelière de Lausanne ( email )

Route de Cojonnex 18
Lausanne, 1000

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