How do private firms use credit lines?

RePEc Short ID: pdr1
ORCID iD: 0000-0003-4376-9162

Agarwal, Sumit; Chomsisengphet, Souphala; Driscoll, John C.

Journal Article

How do private firms use credit lines?

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: Corporations - Finance; Credit; Loans;