We study how credit market deregulation and increased international financial openness have changed corporate borrowing. The evidence comes from a large panel of publicly traded firms in 38 countries over the period 1994-2002. Reforms are measured with a comprehensive new index that tracks six...

We develop a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by "relationship banks" should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from relationship...