Abstract
ABSTRACT This study investigates the loan financing behaviours of Korean firms during the COVID-19 pandemic. I find that financially unhealthy firms and firms with insufficient collateral capacity borrowed less during the pandemic, suggesting that lenders consider credit risk in their lending decisions. Meanwhile, the results provide evidence of credit misallocation. Particularly, zombie firms were able to increase their borrowings and firms increased their borrowings irrespective of their profitability and uncertainty. These results suggest that, without careful monitoring, lenders will suffer loan loss problems to the extent that they misallocated bank credit.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
