Contact Information
Kellogg School of Management
Northwestern University
2211 Campus Drive
christopher.rigsby@kellogg.northwestern.edu
Education
Ph.D., Accounting and Information Management, Northwestern University, 2020 (expected)
M.S., Geophysics, Saint Louis University, 2012
B.S., Mathematics and Creative Writing, Fontbonne University, 2008
Research Fields
Incomplete Contracting, Debt Covenants, Voluntary Disclosure
Curriculum Vitae
Working Papers
The Real Effects of Covenants on Investment Productivity (Job Market Paper)
How do firms adjust project-level operations in response to covenants? I test the real effects of a borrowing-base covenant in the oil and gas industry. In this indus- try, a borrowing-base covenant uses the expected cash flows from the quantities of subsurface oil and gas to set the firm’s credit limit, collateralizes the loan with these quantities, and allows lenders to frequently review the collateral. I show that firms with borrowing-base covenants have higher five-year cumulative oil production, have greater maximum production rates, produce oil more efficiently relative to maximum production rates, and more quickly replace subsurface oil compared to firms without such covenants. The empirical findings suggest that this covenant relies on an investment feedback mechanism: it encourages firms to drill high-quality wells by offering investment funding for productivity and by magnifying the opportunity costs of failing to drill productive wells.