Barter Credit: Warehouses as a Contracting Technology

60 Pages Posted: 5 May 2020

See all articles by Janis Skrastins

Janis Skrastins

Washington University in St. Louis

Date Written: April 2, 2020

Abstract

A large Brazilian agribusiness lender introduces a new contracting technology: grain warehouses. Using runner-up warehouse locations as a control group, I find that lenders' access to these warehouses permits a new debt contract, i.e. a barter credit repayable in grain, increases borrowers' debt capacity and lowers borrowing costs. The effects are stronger when price insurance is important, for municipalities with weaker courts, and for financially-constrained borrowers. Overall, evidence suggests that creditors alter their organizational design to mitigate credit market imperfections.

Keywords: Organizational Design, Warehouses, Output Storage, Barter Credit, Price Insurance, Credit Enforcement

JEL Classification: D23, G32, G33, L22, L25

Suggested Citation

Skrastins, Janis, Barter Credit: Warehouses as a Contracting Technology (April 2, 2020). Available at SSRN: https://ssrn.com/abstract=3567467 or http://dx.doi.org/10.2139/ssrn.3567467

Janis Skrastins (Contact Author)

Washington University in St. Louis ( email )

1 brookings drive
campus box 1133
st louis, MO St Louis 63130
United States

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

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