We provide new insights on the value of strategic alliances from a debt financing perspective. We find that firms entering a strategic alliance receive a lower interest spread from banks that have previously lent to their strategic partners, compared to their loans from other banks. Consistent...

To extend and monitor loans, banks collect detailed and proprietary information about the financial prospects of their customers, many of whom are local businesses and households. Therefore, banks’ loan portfolios contain potentially useful information about local economic conditions. We...