Working paper/research report

Authors list: Bannier, Christina E.

Publication year: 2005

URL: https://hdl.handle.net/10419/23413

Title of series: Working Paper Series: Finance & Accounting

Number in series: 148

Abstract: 

This paper studies optimal risk-taking and information disclosure by firms that obtain financing from both a 'relationship' bank and 'arm's-length' banks. We find that firm decisions are asymmetrically influenced by the degree of heterogeneity among banks: lowly-collateralized firms vary optimal risk and information precision along with the degree of relationship lending for projects with low expected cash-flows, while highly-collateralized firms do so for projects with high expected cash-flows. Incidences of inefficient project liquidation are minimized if the former firms rely on relationship banking to a low degree, the latter to a large degree.

Harvard Citation style: Bannier, C. (2005) Heterogeneous Multiple Bank Financing, Optimal Business Risk and Information Disclosure. (Working Paper Series: Finance & Accounting, 148). Frankfurt am Main: Johann Wolfgang Goethe-Universität. https://hdl.handle.net/10419/23413

APA Citation style: Bannier, C. (2005). Heterogeneous Multiple Bank Financing, Optimal Business Risk and Information Disclosure. (Working Paper Series: Finance & Accounting, 148). Johann Wolfgang Goethe-Universität. https://hdl.handle.net/10419/23413