Bank debt and market debt: an empirical analysis for Spanish firms

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dc.contributor.author Casasola, María José
dc.contributor.author Tribo Gine, José Antonio
dc.date.accessioned 2006-11-08T14:54:20Z
dc.date.available 2006-11-08T14:54:20Z
dc.date.issued 2002-03
dc.identifier.uri http://hdl.handle.net/10016/135
dc.description.abstract This paper examines the effect on the firm's banking cost of the issue of debt securities. We argue over the existence of a positive relationship between the issue of market debt and the reduction of firm's banking cost. This idea relies on three main arguments: i) Banks can delegate to investors the supervision task, a feature that makes bank supervision less costly. ii) The issue of public debt increases firms' bargaining power in front of the banks, as the former can get funds through non-bank financing ch annels. iii) Banks with no prior information on the issuing firm may interpret the issue of debt securities as a positive signal of firm's quality. Additionally, we argue that the previous effects are less important for non-first issues and are sensible to the maturity of the bond issued. We empirically test these and other related theoretical results making use of a database of Spanish non-financial firms during the 1993-1998 period. We find empirical support for our theoretical contentions.
dc.format.extent 904841 bytes
dc.format.mimetype application/pdf
dc.language.iso eng
dc.language.iso eng
dc.relation.ispartofseries UC3M Working Papers. Bussiness Economics
dc.relation.ispartofseries 2002-02
dc.title Bank debt and market debt: an empirical analysis for Spanish firms
dc.type workingPaper
dc.subject.eciencia Empresa
dc.rights.accessRights openAccess
dc.identifier.repec wb020702
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