The costs of being stuck in traffic: Evidence from debt contracting
研究发现，交通拥堵会增加企业的债务融资成本，贷款人会通过更严格的贷款条款、更多契约和业绩定价网格来应对这种运营风险。
While traffic congestion poses a significant risk to companies' operations, little is known about how capital providers respond to such risk. Our study fills the knowledge gap by investigating the impact of traffic congestion on the cost of debt capital. We find that lenders impose stricter price and non-price loan provisions on borrowers exposed to higher levels of traffic congestion. We further document that lenders respond to traffic congestion with more intensive use of covenants and performance pricing grids that trigger an ex-post transfer of control rights rather than those that align interests. These findings, supported by a series of additional analyses, suggest that lenders are concerned about the operational risk of traffic congestion. We also find that traffic congestion impairs lenders' monitoring ability. Specifically, traffic congestion hinders lenders’ monitoring advantages from the proximity to borrowers. Meanwhile, lenders with superior monitoring ability are better at protecting themselves against traffic congestion.