We expect that private firms choose a close relationship with a bank – often based on private information – in order to save on direct or proprietary costs of disclosure. For a large sample of bank relationships in 12 European countries, we find evidence that close bank relationships are...

This paper examines the impact of product market competition and corporate governance on the cost of debt financing and the use of bond covenants. We find that more antitakeover provisions are associated with a lower cost of debt only in competitive industries. Because they are exposed to higher...

In the absence of financial frictions, the purpose of thin capitalization rules is to limit multinational firms’ possibilities of engaging in tax planning via debt shifting. This paper analyzes the effects of thin capitalization rules in the case where firms have limited access to external...