We study the effect of bank loan announcements on the borrowing firms' bond and equity prices. Our sample consists of 896 loan deals signed between 1997 to 2003 involving 364 different U.S. firms. We report the first comprehensive evidence that also firm bond prices react to bank loan...

We survey the extant literature on the effects of both a bank's organizational structure and the physical distance separating it from the lender on lending decisions. Banks do engage in spatial pricing, where the underlying mechanism can be both transportation costs and information asymmetries....

Recent theoretical models argue that a bank's organizational structure reflects its lending technology. A hierarchically organized bank will employ mainly hard information, whereas a decentralized bank will rely more on soft information. We investigate theoretically and empirically how bank...

While the positive growth effects of financial integration are extensively documented, little is known of its impact on small and young firms. This paper aims to fill this void relying on a panel of 60,000 firm-year observations on listed and unlisted companies in Eastern European economies to...

An extensive empirical literature has documented the positive growth effects of equity market liberalization. However, this line of research ignores the impact of financial integration on a category of firms crucial for economic development, i.e., the small entrepreneurial firms. This paper aims...

This paper reviews the theoretical and empirical literature on bank relationships. We begin with a the event study evidence on bank loan announcements and trace our way forward through an overview of papers discussing the benefits and costs of bank relationships. We follow with a review of the...

We investigate the determinants of multiple-bank relationships using a new data set comprised of 1079 firms across twenty European countries. We document large cross-country variation in the average number of bank relationships per firm, uncovering a richness in European financial systems that...

Banks play a special role as providers of informative signals about the quality and value of their borrowers. Such signals, however, may have a quality of their own as the banks' selection and monitoring abilities may differ. Using an event study methodology, we study the importance of the...