Working Paper: NBER ID: w15735
Authors: Efraim Benmelech; Nittai K. Bergman
Abstract: We provide novel evidence linking the level of creditor protection provided by law to the degree of usage of technologically older, vintage capital in the airline industry. Using a panel of aircraft-level data around the world, we find that better creditor rights are associated with both aircraft of a younger vintage and newer technology as well as firms with larger aircraft fleets. We propose that by mitigating financial shortfalls, enhanced legal protection of creditors facilitates the ability of firms to make large capital investments, adapt advanced technologies and foster productivity.
Keywords: Creditor Protection; Vintage Capital; Airline Industry; Technological Change
JEL Codes: E22; E44; G32; G33; L93
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Enhanced creditor rights (G33) | Aircraft age (L93) |
| Enhanced creditor rights (G33) | Fleet size (L93) |
| Creditor rights (G33) | Aircraft vintage (owned aircraft) (L93) |
| Creditor rights (G33) | Aircraft vintage (leased aircraft) (L93) |
| Creditor rights (G33) | Aircraft vintage (financially constrained airlines) (L93) |