IDEAS home Printed from https://ideas.repec.org/h/pal/pmschp/978-3-319-50313-4_10.html
   My bibliography  Save this book chapter

Micro-behavioral Characteristics in a Recessionary Environment: Moral Hazard and Strategic Default

In: Non-Performing Loans and Resolving Private Sector Insolvency

Author

Listed:
  • Ioannis Asimakopoulos

    (Bank of Greece)

  • Dimitris Malliaropulos

    (University of Piraeus, Bank of Greece)

  • Panagiotis K. Avramidis

    (ALBA Graduate Business School)

  • Nickolaos G. Travlos

    (ALBA Graduate Business School)

Abstract

Using a unique data set of corporate loans of 13,070 Greek firms for the period 2008–2015 and an identification strategy based on the internal credit ratings of banks, the study provides evidence that one out of six firms with non-performing loans is a strategic defaulter. Furthermore, it investigates potential determinants of firms’ behavior by relating the probability of strategic default to a number of firm characteristics such as size, age, liquidity, profitability and collateral value. Among others, the analysis provides evidence of a positive relationship of strategic default with outstanding debt and economic uncertainty and a negative relationship with the value of collateral. Also, profitability and collateral can be used to distinguish the strategic defaulters from the financially distressed defaulters. Finally, the relationship of strategic default risk with firm size and age has an inverse U-shape, that is, strategic default is more likely among medium-sized firms compared to small and large firms and it is also more likely among middle-aged firms compared to new-founded and established firms.

Suggested Citation

  • Ioannis Asimakopoulos & Dimitris Malliaropulos & Panagiotis K. Avramidis & Nickolaos G. Travlos, 2017. "Micro-behavioral Characteristics in a Recessionary Environment: Moral Hazard and Strategic Default," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Platon Monokroussos & Christos Gortsos (ed.), Non-Performing Loans and Resolving Private Sector Insolvency, chapter 10, pages 227-253, Palgrave Macmillan.
    • Handle: RePEc:pal:pmschp:978-3-319-50313-4_10
    DOI: 10.1007/978-3-319-50313-4_10
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anastasiou, Dimitrios & Kapopoulos, Panayotis, 2021. "Dynamic linkages among financial stability, house prices and residential investment in Greece," MPRA Paper 107833, University Library of Munich, Germany.
    2. Panagiotis Avramidis & Ioannis Asimakopoulos & Dimitris Malliaropulos, 2023. "Disrupted Lending Relationship and Borrower's Strategic Default," Journal of Financial Services Research, Springer;Western Finance Association, vol. 63(1), pages 91-116, February.
    3. Panagiotis Avramidis & Ioannis Asimakopoulos & Dimitris Malliaropulos, 2021. "Disrupted lending relationship and borrower's strategic default: evidence from the tourism industry during the Greek economic crisis," Working Papers 285, Bank of Greece.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:pmschp:978-3-319-50313-4_10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.