A SPAC divides the process of a private firm going public into two stages: SPAC IPO and its merger with the firm. This division enables us to disentangle the effect of information- and agency-related frictions on security issuance. To this end, we distinguish “premium” from “non-premium”...

The paper develops a new model of private debt financing with an inefficient financial system at its core, where inefficiency is characterized by costly loan monitoring. The model suggests a mechanism that generates the following series of events: a period of low capital inflow despite high...