Do lending relationships affect corporate financial policies?

• Autores: Hadiye Aslan
• Localización: Financial management, ISSN 0046-3892, Vol. 45, Nº 1, 2016, págs. 141-173
• Idioma: inglés
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• Resumen

  • his paper provides new evidence on how lending relationships impact firms' financing and investment decisions. I find that lending relationships have a significant impact on leverage ratios, issuance choices, and the investment structures of relationship borrowers. The influence of relationships is heightened for financially constrained firms. I find a significant decrease in leverage, net debt issuing, and investment activity in the aftermath of lender-specific shocks to lending relationships, including announcements of bank write-downs and downgrades in banks' credit ratings. My findings are robust to controlling for confounding effects that might arise due to unobserved demand and relationship changes