Koskela, Erkki; Stenbacka, Rune - In: Bulletin of Economic Research 56 (2004) 4, pp. 365-377
This paper studies the effect of credit market imperfections, measured by the relative bargaining power of banks, on the agency costs of debt finance. The threshold of obtaining loan finance is shown to be independent of the relative bargaining power of the financier. However, lower relative...