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

See all articles by Joel F. Houston

Joel F. Houston

University of Florida - Department of Finance, Insurance and Real Estate

Christopher M. James

University of Florida - Department of Finance, Insurance and Real Estate

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

Houston, Joel F. and James, Christopher M., Bank Information Monopolies and the Mix of Private and Public Debt Claims. J. OF FINANCE, Vol. 51 No. 5, December 1996, Available at SSRN: https://ssrn.com/abstract=7811

Joel F. Houston

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States

Christopher M. James (Contact Author)

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611-7168
United States
352-392-3486 (Phone)
352-392-0301 (Fax)

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