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This study investigates whether fluctuations in credit supply in a macroeconomy and a relational bank's financial condition affect the capital structure adjustment of firms. Using data for Japanese listed firms from 1988 to 2014, we find that firms adjust their capital structure slower during...
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supply shock using micro-level data from a multinational bank. Borrowers with stronger lending relationships, higher non …. Consistent with a tightening of financing constraints post shock, borrower composition shifts toward larger and less risky firms …
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