Chava, Sudheer; Livdan, Dmitry; Purnanandam, Amiyatosh - In: Review of Financial Studies 22 (2009) 8, pp. 2973-3004
Using a large sample of bank loans issued to U.S. firms between 1990 and 2004, we find that lower takeover defenses (as proxied by the lower G-index of Gompers, Ishii, and Metrick 2003) significantly increase the cost of loans for a firm. Firms with lowest takeover defense (democracy) pay a 25%...
