Bank Information Monopolies and the Mix of Private and Public Debt Claims
J. OF FINANCE, Vol. 51 No. 5, December 1996
Posted: 15 Oct 1996
Abstract
This paper examines the determinants of the mix of private and public debt using detailed information on the debt structure of 250 publicly traded corporations from 1980 through 1990. We find that the relationship between bank borrowing and the importance of growth opportunities depends on the number of banks the firm uses and whether the firm has public debt outstanding. For firms with a single bank relationship, the reliance on bank debt is negatively related to the importance of growth opportunities. In contrast, among firms borrowing from multiple banks, the relationship is positive.
JEL Classification: G21
Suggested Citation: Suggested Citation