The inability to reconcile observed levels of foreign exchange rate volatility with predictions derived from rational expectations models represents one of the most persistent challenges in international finance. This paper shows that such excess volatility puzzles arise from informational...

Using a unique sample of comparable online and in-person loan transactions, we study the determinants of arm's-length and inside lending focusing on the differential information content across debt types. We find that soft private information primarily underlies relationship lending whereas hard...

Using a unique data set of loan applications by small businesses, we study the determinants of loan transactions focusing on the respective roles of private information and borrower proximity. Although credit availability and the offered loan rate decrease in the bank-borrower distance and...

The advent of online lending offers the opportunity to clearly identify transactional and relationship debt in terms of the firm's chosen mode of interaction with the bank. Using a unique data set of comparable online and in-person loan transactions, we study the determinants of arm's-length and...