Do Lending Relationships Affect Corporate Financial Policies?

摘要

This 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.