This paper examines how loan covenant violations impact firm dividend policy. Using contract-level loan data for nonfinancial firms in the U.S., this study provides evidence that the occurrence of a covenant violation significantly increases the likelihood of a dividend reduction in the...

We show that cross-border LBO investments involving U.S. rather than non-U.S. private equity (PE) investors are more likely to have a successful exit (IPO or acquisition). Exogenous increases in effective proximity following the signing of “Open-Sky” agreements between the U.S. and target...