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Conference Paper
Bank loan supply, lender choice, and corporate capital structure
Do credit market conditions affect corporate capital structures? In an attempt to answer this question, I study two natural experiments that affect corporate access to bank credit: the 1961 expansion of bank credit due to the emergence of the market for CDs, and the contraction associated with the 1966 credit crunch. I document several capital structure reactions to these changes in credit market liquidity. First, relative to firms with public debt market access, the leverage ratios of bank-dependent firms decrease (increase) following a contraction (expansion) of bank credit. Second, firms ...