Creditors’ Rights and Strategic Default: Evidence from India
研究印度一项债权人权利法律是否阻止了策略性违约，发现法律适用时贷款表现更好，且权利增强后表现进一步提升，并通过货币废止事件识别策略性动机。
I examine whether stronger creditors’ rights prevent strategic default. Borrowers who cross either of two thresholds are exempt from a creditor-rights law in India. Using a loan-day-level data set, I find that loan performance is better when the law applies and that outperformance increases after a further rise in creditors’ rights. To discern the strategic motive, I use an unprecedented invalidation of the Indian currency whereby holders of high-value currency were forced to declare their cash holdings to banks. Defaulters exempt from the law showed a greater tendency to repay their loans after invalidation.