Plausibly Exogenous [1839] - Loan Securitization (02/14/2025)

LHS Variable
Firms’ borrowing behavior

RHS Variable
Number of new CLO deals launched by firms’ relationship managers

Source of Exogenous Variation
Insurers' cash flows, which act as shocks to their capital supply, to instrument for CLO formation by relationship managers

- Bhardwaj, Ge, and Mukherjee (2022), “Does Loan Securitization Expose Borrowers to Non-Bank Investor Shocks?—Evidence from Insurers”