Small and medium-sized enterprises (SMEs) are the backbone of most Asian economies. The main obstacle to the development of the SME sector is the lack of stable finance. Considering the bank-dominated characteristic of economies in Asia, banks are the main source of financing, and the lack of a...

This paper empirically tests the role of bank lending tightening on non-financial corporate (NFC) bond issuance in the eurozone. By utilizing a unique data set provided by the ECB Bank Lending Survey, we capture the "pure" credit supply effect on corporate external financing. We find that...

Using a sample of 1,593 US firms that go public between 1990 and 2007, we find that VC-backed IPOs experience less financial distress risk post-offering than do comparable non-VC-backed IPOs. After controlling for endogeneity, we find this is related to the screening done by VC-investors, who...

This paper documents the role of capital markets in financing nonfinancial French firms since the adoption of the euro and analyzes its implications for risk using a structural model of credit risk. The analysis suggests that market financing has played a more important role in financing French...

We study the feasibility and optimal design of pre-sale crowdfunding contracts where participating consumers pay a premium above the future expected spot price and financially constrained entrepreneurs balance the potential product-market distortions introduced through pre-sale crowdfunding...

We examine the usage of debt by small firms trading on the over-the-counter (OTC) market and filing annual reports with the SEC. Similar to firms included in the Survey of Small Business Finance, the small OTC firms in our sample are more dependent on debt financing than firms listed on the NYSE...

Prior research shows that Dodd-Frank Act's regulations on credit rating agencies (CRAs) increase rated firms' risk of rating downgrades, regardless of their credit quality (see Dimitrov, Palia and Tang (2015)). Our difference-in-differences estimates suggest that after Dodd-Frank, low-rated...

Using novel data on 1,240 credit agreements, we investigate sources of contractual complexity in the leveraged loan market. While negative covenants are widespread, carve-out and deductible clauses that weaken them are as frequent. We propose simple measures of contractual weakness, which...

This paper investigates whether private equity (PE)-backed acquirers have a “parenting advantage” in the mergers & acquisitions (M&A) market. We employ a sample of 788 PE-backed firms and a carefully matched control group of 6,652 non-PE backed peers, for which we observe the entire...

A recent dramatic rise in the assets managed by passive corporate debt funds has profound implications for firm financing and payout policy. I use fund-specific flows to isolate exogenous increases in firm-level passive debt ownership at a firm. Firms respond to higher levels of passive debt...