dc.contributor.author | Kristiansen, Eirik Gaard | |
dc.date.accessioned | 2006-07-06T10:28:45Z | |
dc.date.available | 2006-07-06T10:28:45Z | |
dc.date.issued | 2005-10 | |
dc.identifier.issn | 0804-6824 | |
dc.identifier.uri | http://hdl.handle.net/11250/162678 | |
dc.description.abstract | Firms choose debt structure and competing banks choose monitoring intensity.
Monitoring improves credit allocation, but creates informational lock-in
effects in bank-borrower relationships. In a competitive credit market, banks
dissipate anticipated profit from serving locked-in borrowers subsequently revealed
to the bank as good to attract new borrowers with unknown credit
quality. Consequently, banks’ lending strategies result in cross-subsidies from
good to bad borrowers. We investigate how firms’ choice of debt structure
interacts with the cross-subsidies inherent in banks’ lending strategies. The
analysis sheds light on how dynamic bank competition determines monitoring
intensity, seniority, and maturity structure in bank dependent industries. | en |
dc.format.extent | 317278 bytes | |
dc.format.mimetype | application/pdf | |
dc.language.iso | eng | en |
dc.publisher | Norwegian School of Economics and Business Administration. Department of Economics | en |
dc.relation.ispartofseries | Discussion paper | en |
dc.relation.ispartofseries | 2005:21 | en |
dc.title | Strategic bank monitoring and firms’ debt structure | en |
dc.type | Working paper | en |