Imbs, Jean; Rancière, Romain - Department of Economics and Business, Universitat … - 2005
the theory on the thus selected sample of overhang countries. In the spirit of event studies, we ask whether, as overhang … level of debt is reached: (i)investment falls precipitously as it should when it becomes optimal to default, (ii) economic …-empt default and exact punitive interest rates. We find a systematic response of investment, particularly when property rights are …
