Internalisation theory explains how the boundaries of firms are set at the margin where the advantages of internal coordination are just offset by the costs of supplanting external markets. Internalisation is a general principle that can be used to explain the boundaries of any institution in...

type="main" xml:lang="en" <title type="main">Abstract</title> <p>We study the factors that determine the debt funding of subsidiaries of multinational banks. Our findings indicate that the funding of subsidiaries is determined by the internalization advantages of the parent bank and the home country, in addition to the...</p>

We model default with novel loan data maintained by the Portuguese Central Bank for 31,025 accounts of privately-held firms that include 30 accounting ratios and non-accounting information on size, age, industry and geographic regions. Interest costs to gross income, number of days in payables...