Aggregate Risk and the Choice between Cash and Lines of Credit

Viral V. Acharya, Heitor Almeida, Murillo Campello

NBER Working Paper No. 16122
Issued in June 2010

---- Acknowledgements ----

Our paper benefited from comments from Hui Chen and Ran Duchin (discussants), and seminar participants at the 2010 AEA meetings, Moodys/NYU Stern 2010 Credit Risk Conference, DePaul University, New York University, University of Illinois, UCLA, and Emory University. We thank Florin Vasvari and Anurag Gupta for help with the data on lines of credit and Michael Roberts and Florin Vasvari for matching of these data to COMPUSTAT. Fabricio D'Almeida, Rustom Irani, Hanh Le and Quoc Nguyen provided excellent research assistance. We are also grateful to Jaewon Choi for sharing with us his data on firm betas, and to Thomas Philippon and Ran Duchin for sharing their programs to compute asset and financing gap betas. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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