We use the SEC Tick Size Pilot Program to show that stock liquidity reduces the cost of bank loans. Treated firms experience a 52 basis point increase in the cost of borrowing during the Tick Size Pilot Program; an effect that reverses when the program ends. We find similar results in a broad...

We examine the relation between bank risk management procedures and sales of mortgages during the financial crisis of 2007-2009. Research suggests that banks employing an originate-to-distribute strategy devoted little effort to screening, thereby diminishing their ability to sell loans during...

This paper examines whether firm reputation impacts borrowing costs and thus investment. Using unique data from Fortune's Most Admired Companies surveys, I find that reputable borrowers enjoy lower borrowing costs and receive more favorable loan contract terms. My identification strategy is...

This paper is motivated by high levels of non-performing loans in the Zimbabwean banking sector since dollarization in 2009. Banks are well known for their function of providing liquidity in the economy. Normal loan awarding require credit analysis. Credit analysis is undertaken to assess the...

Australia's Kyoto Protocol ratification (KPR) in December 2007 mandates the country to reduce greenhouse gas (GHG) emissions, hence affecting firms in the highest emitting industries. We exploit the KPR as an exogenous increase in environmental risk facing the highest GHG emitters. We find that...

Recent evidence suggests that investors struggle to process complex financial disclosures. Relative to equity and public debt investors, banks have unique advantages in acquiring information and can impose contractual terms to mitigate information frictions. We investigate whether financial...

Uncertainty in banking regulation may impose widespread economic costs by increasing fi nancialconstraints on credit availability. Four years of Dodd Frank uncertainty over undecided riskweightings increased regulatory uncertainty for smaller banks, restricting "vanilla" interest ratehedging...

According to Article 210 of the Commercial Law, a bank (or a firm) with an intention of repurchasing shares has to make two decisions at the board of directors. The one is the decision about whether a bank has a tendency of repurchasing shares in the future or not and then about how many shares...

We investigate how firms’ stock performance during the COVID-19 crisis varies, depending on firm–bank relationships. Using Japanese firms’ data, we find that the outbreak of COVID-19 caused a sharp drop in the stock performance of both firms with more concentrated bank relationships and...

This study investigates the link between capital market discipline and bank-level credit risk with a special emphasis on the role of bank ownership structure. Focusing on a large emerging market, Turkey, characterized by prominent state bank presence, our baseline regression results indicate...